China's State Grid warns of tight balance between power supply, demand

BEIJING (Reuters) – China’s State Grid warned of a “tight balance” between power supply and demand through winter until spring, even though a power crunch has eased following measures to boost coal supplies and get large users to cut back on electricity.

The firm said on Sunday (Nov 7) there could even be power outages as hydropower generation is expected to fall while consumption picks up during the winter heating season.

“The grid would overall see a tight balance of the supply and demand situation and power shortage in some regions,” the firm, which handles electricity transmission in three-quarters of China, said in a statement.

By Saturday, almost no region required residential and industrial users to cut power use, the firm said, but added that some high-polluting firms that are large consumers remain under orders to reduce operation during peak hours of use.

“The current electricity supply and demand situation in the region managed by the company has returned to normal,” added State Grid.

A wide swathe of China has suffered outages since May as soaring prices and tight supply of coal, a key fuel for its power generation, restricted power plants’ operations, as robust industrial activity after the Covid-19 pandemic stoked demand.

China’s measures to stabilise the coal market and boost profitability of power plants ranged from approvals for greater coal production to a crackdown on coal price speculation and freeing up electricity prices.

Coal inventories stand at 99.32 million tonnes at power plants in the region supplying State Grid, the company said, or enough for 20 days of use.

This week, the state planner also said China’s coal supply situation had improved.

Weather experts forecast La Nina conditions to return this winter, indicating possible colder temperatures in China’s north and less rainfall in its south.

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