SOEs to step up power supply amid heat wave

China's State-owned enterprises, including power generators and grid operators, are making all-out efforts to ensure adequate power supply in the country in response to recent surging electricity demand caused by scorching temperatures in many parts of China.

As the country has seen a continuous heat wave since June in many regions, triggering a sharp increase in power demand, China Energy Investment Corp has been stepping up energy supplies in July to meet the growing power demand, with daily coal shipments reaching 991,000 metric tons, an increase of 21.1 percent year-on-year.

State Power Investment Corp reported record power generation during the first half, up 4.78 percent year-on-year to 329.97 billion kilowatt-hours, while its Haiyang nuclear power plants in Shandong province are also working at full capacity, generating more than 1.18 billion kWh of clean power so far this summer to meet power demand.

This is in response to recent requirements by the State-owned Assets Supervision and Administration Commission calling for power generation enterprises to do their best in providing power supply, for coal enterprises to make every effort to ensure thermal coal supply and for power grid companies to ensure household power consumption and production safety.

China's centrally administered SOEs should improve their long-term mechanism for power supply through measures including more investments in power projects and sci-tech innovations, SASAC said.

The China Electricity Council predicted that the highest power demand in China this year will be around 1.37 billion kilowatts, an increase of around 80 million kW compared to 2022, or even 100 million kW higher in case of a prolonged period of widespread extreme weather.

The council said the country's power use, a key barometer of economic activity, will register stable growth in 2023, driven by the overall recovery of the country's economy, with power consumption expected to increase by about 6 percent year-on-year to reach 9.15 trillion kWh.

Overall electricity supply and demand are expected to remain balanced throughout the year, with possible localized strained power supply situations during certain periods, the council said in a recently released report in Beijing.

While China Southern Power Grid, whose business covers five areas — Guangdong, Yunnan, Guizhou and Hainan provinces and the Guangxi Zhuang autonomous region — said the electrical load in these five areas hit a historical record this year, State Grid Corp of China predicts China's power supply and demand this summer will see an overall tight balance with regional power shortfalls likely.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said that during regional power shortfalls when electricity demand exceeds available supply, a portion of electricity can be squeezed out from industrial usage, which currently accounts for 70 percent, to ensure residential supply, which accounts for less than 15 percent.

The Central Commission for Deepening Overall Reform on Tuesday approved a wide range of proposals on markets including the country's power networks and oil and natural gas markets, saying that the country will further reform and accelerate the construction of a power system that is "economically efficient, flexible and intelligent in supply and demand coordination".

In the oil and gas markets, China will focus on improving national oil and gas security capabilities and ensure stable and reliable supplies, said the commission.

Yicai.com said many coal-fired power units across the country, in addition to stepping up coal supplies, are also accelerating upgrades and transformation as well as complementing wind power and photovoltaics to enhance their capacity to meet peak demand.

Coal-fired power units can save approximately 4 to 10 grams of standard coal per kWh on average after energy-saving and efficiency improvements, it said.

The China Electricity Council said the country is expected to come up with more green energy sources in 2023 with nonfossil fuel energy sources, such as wind and solar power, expected to stand at around 60 percent of its total installed electricity generation capacity by the end of 2023.