CHINA has called for more coal distribution to power plants to address the tight electricity supply that has been seen in many parts of the country, its top planning agency said yesterday.
The National Development and Reform Commission said coal shipments will be increased to power producers in the Beijing-Tianjin-Tangshan region and central China, and production of the fuel will be boosted in key producing provinces including Shanxi, Shaanxi and Henan.
A severe snowstorm which hit China early this year affected transport and destroyed power utility facilities, leading to a supply shortfall for thermal coal, used to generate roughly 80 percent of China's electricity. As a result, power supplies in 19 provinces had been constrained in the first quarter, the NDRC said in a statement.
It said power demand would rise rapidly with climbing temperatures and could reach a peak during the Beijing Olympics in August. It forecast hotter than usual weather this summer which would boost use of energy-intensive air-conditioners, and lower than average rainfall which would cut hydropower output.
Coal inventories at China's power plants stood at 22.66 million tons at the end of March, enough for 12 days of consumption, the commission said.
The coal supply is also under pressure from higher coal prices, it said. Major power firms sign term contracts for most of their fuel supplies with miners, paying less than market prices.
Authorities are now urging power plants and coal producers to fulfill their contracts under agreed quality, amount and prices, said Xu Zhimin, an inspector at the NDRC's bureau of economic operations, at a press briefing.
"For coal not under annual contracts, prices are open and should be market oriented. But we also don't want to see prices rise too fast as too rapid an increase could also be harmful to the coal industry," Xu said.
Coal prices have risen on the snowstorms in China and its crackdown on small illegal mines, as well as power shortfall in South Africa and floods in Australia early this year.
Chinese power firms' margins are squeezed by higher fuel costs and state-set utility tariffs. The China Business News said yesterday the NDRC may send a plan to the State Council within days seeking help for the power-generating sector.