China Shuts Less Than 1% of Power-Generating Capacity

By Bloomberg News

Jan. 6 (Bloomberg) -- China, facing icy temperatures and heavy snowfall, shut 0.5 percent of its electricity-generating capacity as bad weather hampered coal deliveries to power plants.

The world’s second-largest energy user took offline 4,780 megawatts of capacity linked to its main network as of Jan. 3, according to data provided by State Grid Corp. of China, the dominant grid operator. China’s overall capacity reached 874,000 megawatts as of the end of last year. Coal is used as fuel at about 80 percent of the country’s generators.

Temperatures in northern China may drop to as low as minus 32 degrees Celsius (minus 26 degrees Fahrenheit) from this evening to tomorrow night after the heavy snowfall this week, the China Meteorological Administration said. Coal stockpiles at power plants connected to State Grid’s network have fallen 4.3 percent since Dec. 28 to 21.11 million metric tons, enough for up to nine days of consumption, data from the company showed.

“It’s definitely not as serious as in early 2008,” Dave Dai, a utility analyst with CLSA Asia Pacific Markets, said by phone from Hong Kong. “The transportation bottlenecks have been easy in general. In certain provinces, coal stockpiles are low, but that doesn’t mean there isn’t enough coal to go around.”

In January 2008, China suffered its worst snowstorms in 50 years. The blizzards, blamed on the La Nina phenomenon, left millions of travelers stranded during the Lunar New Year holidays and factory closures caused an estimated 111 billion yuan ($16.2 billion) in economic losses.

China shut 7 percent of its coal-fired power generation capacity, or 40,990 megawatts, after deliveries of the fuel were delayed by snowstorms at that time, the official Xinhua News Agency reported.

Coal Shares Rise

Coal companies climbed in Hong Kong trading today amid plunging temperatures on the mainland, outpacing the 0.8 percent gain in the benchmark Hang Seng Index as of the midday break.

China Shenhua Energy Co., the country’s biggest producer of the fuel, advanced 2.8 percent. China Coal Energy Co., the No. 2, added 5.7 percent, while Yanzhou Coal Mining Co., the third- biggest, gained 2.8 percent.

State Grid is limiting electricity in central China because of reduced coal stockpiles, the China Business News reported today. The central provinces of Hubei and Jiangxi had the largest power shortage nationwide as of Jan. 3, according to the data from the grid operator.

To contact the reporter on this story: Ying Wang in Beijing at ywang30@bloomberg.net