Record cold weather in China sends power demand through the roof

January 11, 2021, 3:26 pm | Admin

BEIJING (Reuters) - Exceptionally cold weather sweeping through China has caused a huge increase in power demand in the world’s largest energy consumer and hampered transportation.

Frigid weather across north Asia has caught utilities and liquefied natural gas importers off guard as demand for power lowered inventories and pushed spot prices to record levels.

China’s Central Meteorological Station released the first cold warning in 2021 earlier in the week to several regions. Cities such as the eastern port city of Qingdao recorded the lowest temperature in history and the capital city Beijing had coldest day since the 1960s on Jan 7.

At least nine provincial grid systems in northern China saw peak power load hitting historic highs this week, according to China’s State Grid.

China’s industrial belt, where a stunning manufacturing recovery from the coronavirus pandemic boosted energy demand, experienced a temporary power crunch in the last cold snap in December.

“The (latest) historic peak load came as extreme cold weather increased demand for electricity-powered heating facilities, which account for 48.2% of total load,” an official from the State Grid told state television on Thursday.

China has been replacing coal burning with gas- or electricity-fueled heating devices as part of a campaign to combat air pollution in its smog-prone northern regions.

The only remaining coal-fired power plant in Beijing, managed by state-backed China Huaneng Group as a backup power source, resumed operations two weeks ago in order to meet the surging electricity demand.

Gas demand also surged in northern parts of China, where gas is now a dominant heating fuel for more than 20 million homes, with prices touching multi-year highs last month even as the country imported record levels of LNG cargoes.

TRANSPORT ISSUES

The cold wave also snagged transportation in the north, adding more pressure on an already overwhelmed logistics system.

Maritime administrations around Bohai Bay issued temporary shipping bans on Wednesday following strong wind and the expansion of sea ice to 40 sea miles from 10 sea miles in late December. The ice is expected to reach an alarming level of 60 sea miles in mid-January.

Experts from China’s natural resources ministry warned that sea ice would affect fishing, offshore oil and gas production and port operation in Bohai and Yellow Sea regions although the country’s biggest offshore oil and gas producer CNOOC Ltd, said its Bohai operations were normal.

Qinhuangdao port, one of the largest coal transporting hubs, recorded the biggest number of vessels waiting in anchorage on Thursday since September 2018 due to the harsh weather. The port did not immediately reply to a Reuters request for comment.

Last modified on January 11, 2021, 3:28 pm | 150