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Recently, various provinces and cities in China take measures to limit production and electricity to alleviate China power shortage. Actually, this is not the first time that China government issued relevant documents on dual control of energy consumption. But this is the first time that electricity limitation measure is being implemented in various provinces in China at the same time.

This time China government is mainly aiming at “double high” industries, that is, high-pollution and high-energy-consuming enterprises. Judging from the implementation of the provinces, the current production restrictions and power restrictions involve a wide range of areas. Except for the nine provinces with the red warning in the NDRC document(see picture below), many provinces under the yellow warning, such as Zhejiang, Jiangxi, and Guizhou, have also begun to adopt production restrictions measures to ensure the completion of this year’s “dual control” target.

The current round of production restrictions has continued to exceed expectations. Most regions and industries will continue to limit production until after the National Day, while some provinces will take longer. For example, Ningxia directly announced that high-energy-consuming enterprises will stop production for one month. Yulin, Shaanxi, Yunnan Production restrictions for electrolytic aluminum, cement, chemical products and other industries will continue until the end of the year, which may cause a significant reduction in production capacity.

From the perspective of specific industries, the industries that have been greatly affected by the “double restriction” policy include but are not limited to the four major industries of steel, electrolytic aluminum, cement, and chemical fiber. The main characteristics of these industries are high power consumption and high carbon emissions. Measures include direct suspension of production, reduction of production capacity (ranging from 20% to 90%), staggered production, time-based power restriction, and reduction of electricity concessions.

Measures and duration for China power shortage from different provinces

Ningxia province: Limit high-energy-consuming enterprises for a month. Resident’s electric runs normally.

Guangdong province: Allow enterprises to stagger production for 2 days from Sunday to Thursday. The duration is uncertain. Residents electric runs normally.

Jiangsu Province: Limit enterprises from Sep.15 to Sep.30. Resident’s electric runs normally.

Zhejiang province: Limit high-energy-consuming enterprises since Sep 21. The duration is uncertain. Resident’s electric runs normally.

Guangxi Province: The production of high energy consumption enterprises such as electrolytic aluminum, alumina, steel, cement, etc. shall be restricted, and clear emission reduction standards shall be put forward Since September 2021. The duration is uncertain. Resident’s electric runs normally.

Henan Province: Limit partial enterprises for 3 weeks. Resident’s electric runs normally.

Yunnan Province: The average monthly output in September, October, November, December is not higher than 10% of August output. Resident’s electric runs normally.

Shanxi province: The average monthly output is not higher than 60% of last month’s output. Duration from September to December. Resident’s electric runs normally.

Jilin Province: Stagger electric limitation for both enterprises and residents from 5:00-11:00 and 16:30-23:30 every day for different areas. The duration is uncertain.

Heilongjiang Province: Stagger electric limitation for both enterprises and residents every day for different areas. The duration is uncertain.

How people’s life be affected by power shortage?

Absolutely, this power shortage will affect many people’s life. But at this current time, the China government is aiming to limit factories and enterprises electric. Except Heilongjiang and Jilin province, resident electric haven’t been involved. However, factories have to close for a few days and months, which will absolutely influence worker’s income. This may also cause an increasing on consumer goods if this restriction last long period.

What causes China power shortage?

Coal prices are rising.

Thermal power generation generally requires coal, but there is a huge rising on coal prices this year. The price is 500 yuan/ton in May and 1,400 yuan/ton in September. Coal prices have been at a high level this year, and power plants have less coal. The lack of coal storage in power plants has led to limited power generation by power plants, leading to tight power supply.

China government issued energy consumption dual control.

Recently, the China government issued a notice to further improve the dual control system of energy consumption, and require all regions to take effective measures to meet the annual energy consumption dual control target. Therefore, in order to achieve the goal of energy consumption reduction, the red and yellow warning provinces and cities have implemented many measures to make power restrictions and production shutdowns a reality.

China is upgrading its economic form.

Power curtailment can also accelerate the elimination of outdated production capacity and accelerate the upgrading of the industrial structure.

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