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Coal supply secured

By Yu Tianyu (China Daily)
Updated: 2008-08-22 09:28

A coal storage yard in Zhejiang in this photo taken on May 20, 2008. Measures have been initiated to boost the output of coal used for power generation and to improve transportation in a bid to ease coal supply for power plants, the National Development and Reform Commission (NDRC) said in a statement yesterday.[Asianewsphoto]

Measures have been initiated to boost the output of coal used for power generation and to improve transportation in a bid to ease coal supply for power plants, the National Development and Reform Commission (NDRC) said in a statement yesterday.

Because of the blizzards early this year and transportation difficulties in some regions, some areas and power plants have been facing a coal crunch and forced to put caps on power consumption.

Li Yangzhe, an official of the NDRC, said relevant government departments have intensified coordination of coal supply to the earthquake-hit Sichuan province, the Beijing-Tianjin-Tangshan area and Olympic host and co-host cities.

Big coal producers, which have good facilities and are well managed, are encouraged to boost their output.

Shenhua Group Corp, China's biggest coal producer, has increased its output. It produced 155.1 million tons of coal in the first seven months of the year, up 15.8 percent year-on-year. Its sales volume was about 180.8 million tons, including 130 million tons of coal for power generation.

According to China Electricity Council, thermal coal prices at Qinhuangdao, one of the country's major ports for coal delivery, increased by over 300 yuan ($43.81) per ton between April and June.

Soaring coal prices have driven most Chinese power companies into the red. The five leading power firms - Huaneng, Datang, Guodian, Huadian and China Power Investment - have said their power generation businesses are expected to see losses in the first half of the year.

The government raised on-grid electricity tariff by 0.02 yuan per kWh - an average of 5 percent - from Wednesday, in a move to reduce domestic power producers' losses and help boost supplies.

Ministry of Railways officials have said about 10.2 billion tons of coal have been transported during the first seven months, up 98.4 million tons year-on-year. This includes 69 million tons of coal used for power generation.

Li said the coal reserve in the country's major power plants was 23.4 million tons, merely enough to support 12 days of operations, increasing by 4 million tons late July.

In the first seven months of the year, especially during the peak summer time, China's power supply stayed stable and the country's economic development momentum was unhampered, he added.

Li pointed out that coal and electricity shortages are mainly caused by the economic development model and inappropriate industrial structure and system. It does need comprehensive solutions, but currently the NDRC is focusing on coal supply for the peak winter season, he added.