The tide of power and production restriction in China affects the global supply chain
Recently, China's provinces and cities have taken measures to limit production and power consumption in order to alleviate China's power shortage. In fact, this is not the first time that the Chinese government has issued relevant documents on dual control of energy consumption. However, this is the first time that China's provinces have implemented power rationing measures at the same time.
This time, the Chinese government mainly focuses on "double high" industries, that is, enterprises with high pollution and high energy consumption. From the implementation of each province, the current production and power restrictions cover a wide range. Guangdong, Jiangsu, Zhejiang, Shandong and other places have issued strict power and production restriction policies, including power restriction during nonworking hours in some plant areas, arrangement of enterprise peak shifting production, and shutdown of high energy-consuming enterprises for half a month. In addition to the nine red warning provinces in the NDRC documents (see the figure below), many yellow warning provinces such as Zhejiang, Jiangxi and Guizhou have also begun to take production restriction measures to ensure the completion of this year's "double control" goal.
From the perspective of limited film impact, the chemical industry has the widest impact. Guangdong, Jiangsu, Zhejiang and Shandong are major chemical industry provinces. Sichuan, Hubei and Yunnan also have many chemical industry chains, involving more than 10000 chemical enterprises. Electricity and production restrictions have driven the prices of chemical products to rise across the board. At the same time, downstream enterprises are facing the dual pressure of price rise and shortage.
Measures and duration of different provinces to deal with China's power shortage
Ningxia Province: limit high energy consuming enterprises for one month. Residential electricity is in normal operation.
Guangdong Province: enterprises are allowed to stagger production for two days from Sunday to Thursday. The duration is uncertain. Residential electricity is in normal operation.
Jiangsu Province: limited to enterprises from September 15 to September 30. Residential electricity is in normal operation.
Zhejiang Province: restrict high energy-consuming enterprises from September 21. The duration is uncertain. Residential electricity is in normal operation.
Guangxi Province: since September 2021, the production of high energy consuming enterprises such as electrolytic aluminum, alumina, steel and cement will be limited, and clear emission reduction standards will be put forward. The duration is uncertain. Residential electricity is in normal operation.
Henan Province: limit some enterprises for 3 weeks. Residential electricity is in normal operation.
Yunnan Province: the average monthly output in September, October, November and December is not higher than 10% of the output in August. Residential electricity is in normal operation.
Shanxi Province: the average monthly output is no higher than 60% of the output of last month. The term is from September to December. Residential electricity is in normal operation.
Jilin Province: staggered power rationing is implemented for enterprises and residents in different regions from 5:00 to 11:00 and from 16:30 to 23:30 every day. The duration is uncertain.
Heilongjiang Province: staggered power rationing is implemented for enterprises and residents in different regions every day. The duration is uncertain.
How does power shortage affect people's life?
Of course, the power shortage will affect the lives of many people. But at present, the goal of the Chinese government is to limit the power consumption of factories and enterprises. Except for Heilongjiang Province and Jilin Province, residential power consumption has not been involved. However, the factory must be closed for a few days or months, which will definitely affect the income of workers. If this restriction continues for a long time, it may also lead to a rise in consumer goods prices.
What are the reasons for China's power shortage?
The reasons for power rationing and shutdown are not complex. Two reasons lead to such results. First, the power shortage caused by the rise in coal prices. Second, dual control of energy consumption brought by carbon neutralization.
1. The increase of coal price is too large and the power is tight
At present, the proportion of thermal power generation in China's power generation structure is still more than 70%, and thermal power uses coal for power generation. People may not notice how exaggerated the rise in coal prices this year.
The thermal coal used for thermal power is more than 500 yuan a ton in May and about 800 yuan in summer. Now it is more than 1400 yuan. Due to the excessive increase in coal prices, a thermal power plant will now have a net loss of millions every day. The coal price has been high this year, and there is less coal stored in the power plant.
The low coal storage in the power plant limited the power generation capacity of the power plant, and the power generation loss of the thermal power plant also undermined its enthusiasm for power generation. This makes the power supply tense.
2. Dual control of energy consumption, carbon neutralization and standard pressure
Power shortage is on the one hand. The current power rationing and shutdown sweeping more than a dozen provinces across the country is mainly due to the dual control of energy consumption.
In the outline of the 14th five-year plan, "reducing energy consumption and carbon dioxide emissions per unit of GDP by 13.5% and 18% respectively" is one of the main binding indicators of economic and social development. The government work report at the beginning of this year also clearly stated that the goal of reducing energy consumption per unit of GDP in 2021 is about 3%. At present, there are only three months left in the whole year.
On August 17, 2021, the national development and Reform Commission issued the barometer for the achievement of the dual control target of energy consumption in various regions in the first half of 2021, in which Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi and Jiangsu did not rise but fell. Except for Shaanxi, the other eight provinces were listed as the first level early warning for the reduction of energy consumption intensity.
The reduction rate of energy consumption intensity in 10 provinces in Zhejiang, Henan, Gansu, Sichuan, Anhui, Guizhou, Shanxi, Heilongjiang, Liaoning and Jiangxi in the first half of the year did not meet the progress requirements, which is a secondary early warning.
The national development and Reform Commission requires all regions to take effective measures to ensure the completion of the double control target of energy consumption throughout the year, especially the target task of reducing energy intensity.