# China Has Too Much Power Capacity



## hkskyline (Sep 13, 2002)

*Utility CLP sees looming power oversupply in China *

Oct 26 (Reuters) - Asian utility CLP Holdings sees an emerging oversupply of power in China, after a burst of new generation capacity, but says there is plenty of growth potential for power investors in India and southeast Asia. 

China has become the second largest power market after the United States, with 75 gigawatts of capacity expected to be added this year as the country seeks to avoid blackouts and feed a rapidly growing economy. 

"Potential oversupply may loom in the near future -- utilisation in China is coming down," said Mark Takahashi, director of corporate development at CLP. 

"Firms will be less profitable -- people will be looking to place capacity elsewhere," he told an energy conference in Singapore. 

Hong-Kong based CLP has over 4,000 megawatts of capacity in China, with other power generation around Asia in operation or under construction totalling 17,500 megawatts. 

The rush for new supply in China has been dominated by coal plants to tap China's huge reserves, as well as a wind power boom and liquefied natural gas imports that started this year, following blackouts in 2004 that led to record oil imports. 

Takahashi said new power generation in China was outstripping GDP growth, though any oversupply could be temporary and would vary by province. 

He said India remained a huge potential power market, with the government aiming to double the country's power capacity. 

"It's by far the best investment in our portfolio," he said, pointing to Indian plans to boost coal and hydro power. CLP has a target for 5 percent renewable generation by 2010. 

"We see it as important to hedge our coal position across the region," Takahashi said. While he saw southeast Asia as a smaller potential market, he said the capacity overhang from the Asian financial crisis in 1998 had disappeared. 

"It's a great opportunity to develop and invest in southeast Asia, as illustrated by Indonesia's declining reserve margins and brownouts in Jakarta." 

However, Indonesia may have difficulty attracting investors in infrastructure projects without the government shouldering more of the risk, lawyers at the conference said.


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## Ted Ward (Apr 16, 2005)

You can never have too much power. 

And a target of 5% renewable generation by 2010 for India? Thats a pathetic target.


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## null (Dec 11, 2002)

EVERYTHING is oversupplied in China nowdays


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## Amit (Apr 30, 2005)

Ted Ward said:


> You can never have too much power.
> 
> And a target of 5% renewable generation by 2010 for India? Thats a pathetic target.


The quote was refering to the company's target not India.

India already produces 4,500 MW electricity from wind energy; currently it is the 4th largest wind power producer in the world. 

Wind energy accounts for 4% of total power generation in India. The target is to reach 10% of total by 2012.

India's Suzlon energy is the 6th largest wind turbine manufacturer in the world. It has manufacturing plants in India and USA, a new plant is coming up in China. Its R&D centres are in India, Germany and Netherlands. In mid 2006, it acquired gearbox maker Hansen (Belgium) for $570 million.


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## LordChaos80 (May 10, 2006)

Perhaps there is an overproduction in certain places, but there are still regions (including big cities in central China like Changsha, Wuhan and Hefei) that I would call undersupplied. So they should optimize overall power distribution.


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## vipermkk (Feb 12, 2006)

How can it be? Eastern China is lacking for power big time.


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## duskdawn (May 13, 2006)

That is strange.


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## hkskyline (Sep 13, 2002)

*China power deficit to persist despite output rise *

BEIJING, Aug 23 (Reuters) - China's power shortages will persist into the second half of this year, despite power generation for the full year expected to grow some 15 percent from a year earlier, the government said on Thursday. 

The supply deficit will remain in southern Guangdong and Hainan provinces in the second half and power usage needs to be curbed, the National Development and Reform Commission (NDRC) said in an analysis report on its Web site ( www.ndrc.gov.cn ). It did not provide any figures for the deficit, nor did it disclose any specific measures to restrict demand. 

The government of Guangdong province had warned electricity shortages in the province could increase to more than 5 gigawatts (GW), or around 10 percent of power it currently uses, in the second half if measures are not taken to add to already booming power output. Some regions in the province have been following power usage curbs since earlier this year. 

The NDRC said power supply gaps will be "moderately large" in southwestern provinces of Guizhou and Yunnan due to insufficient coal supplies. The commission did not mention the fact that part of the power output in the two provinces was transferred to the economically more developed Guangdong province. 

Electricity flows to Guangdong from Guizhou and Yunnan reached a record high of 13.2 GW in the first half of this year, with total sales to Guangdong up 16.5 percent from a year ago to 27.74 billion kilowatt hours, the Southern Grid, the grid operator in these provinces, had said. 

The NDRC said a small supply gap is expected to happen in the Beijing-Tianjin-Tangshan and Shanxi grids on fast rising demand in the north China region. 

Power demand on other grids including East China, Central China and Northwest China can be basically met by supplies, it said. 

Power usage restriction may also be implemented in Tibet and Xinjiang if demand surges, as the country's only two isolated power networks have little chance of getting extra supplies from other grids, the NDRC said. 

China's power generating capacity has been rising fast in recent years as large investments poured in after the country was hit by widespread brownouts in 2004 and 2005 due to insufficient supply and soaring demand. 

The China Electricity Council said installed power capacity increased 47.3 GW in the first seven month of this year, or well over half of the UK's total, after it surged some 100 GW last year. 

But demand for electricity has shown little signs of easing in an economy experiencing double-digit growth. 

Given the ongoing expansion of the economy, electricity demand will stay at a fairly high level in the second half, the NDRC said.


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## big-dog (Mar 11, 2007)

Chin will eventually have a power over supply with the full opening of three gorge dam and the 30-40 nuclear plants. 

This is not a bad thing though, i believe by then China can transfer from coal power plants to a cleaner way to generate power to protect the environment. currently the major pollution source is coal power plants.


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## didu (Jun 13, 2005)

power is like money and sex, you can never have too much of it.


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## snow is red (May 7, 2007)

Installed electric capacity reaches 713m kilowatts
(Xinhua)
Updated: 2008-01-14 14:29


China's installed capacity of electric power reached 713 million kilowatts at the end of 2007, up from 622 million kilowatts in 2006, maintaining an overall balance of supply and demand, the country's electricity council said on Sunday.

After two generating units with a capacity of one million kilowatts in Tianwan nuclear power plant went into operation, the installed capacity of nuclear power rose to 8.85 million kilowatts at the end of 2007. Tianwan nuclear power plant, the largest nuclear power station in Asia, is located in the city of Lianyungang, eastern China's Jiangsu province.

The country's installed capacity of hydropower and thermal power climbed to 145 million and 554 million kilowatts, both up more than 10 percent year-on-year.

Wind power capacity doubled to 4.03 million kilowatts

http://www.chinadaily.com.cn/bizchina/2008-01/14/content_6392626.htm


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## Huhu (Jun 5, 2004)

> *Southern China Shuts Power Capacity on Coal Shortage*
> By Wang Ying and Ying Lou
> 
> Jan. 15 (Bloomberg) -- China has shut down more than 6 percent of the power generating capacity in its southern provinces because of a coal shortage, with the region bracing for the worst electricity shortage in at least five years.
> ...


...


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## gladisimo (Dec 11, 2006)

02tonyl said:


> Installed electric capacity reaches 713m kilowatts
> (Xinhua)
> Updated: 2008-01-14 14:29
> 
> ...


In other words, 713 GW, why do they use million kW?


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## big-dog (Mar 11, 2007)

didu said:


> power is like money and sex, you can never have too much of it.


it's so true, you freak!


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## tiger (Aug 21, 2004)

hkskyline said:


> The China Electricity Council said installed power capacity increased 47.3 GW in the first seven month of this year, or *well over half of the UK's total*, after it surged some 100 GW last year.




That's incredible.


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## hkskyline (Sep 13, 2002)

*Record power shortage hits China *

BEIJING/HONG KONG, Jan 23 (Reuters) - China is facing its most severe power shortage ever as some plants struggle to secure increasingly costly coal and others shut down capacity rather than rack up losses by selling electricity at low rates. 

The rebellion by power plant managers unwilling to generate at a loss is likely to worry policymakers still haunted by the nationwide diesel supply crisis last autumn, when refiners under similar pressure quietly curbed output and forced the government to make an unplanned and unwanted rise in fuel prices. 

Beijing is battling high inflation and has promised not to raise energy prices in the short-term, so few analysts expect an immediate hike in power tariffs. But the shortages may prove a tricky test of the central government's resolve and power. 

Brownouts have hit at least 13 provinces, and at its peak nationwide demand outstripped supply by nearly 70 gigawatts, or the equivalent of most of Britain's generating capacity, the official People's Daily newspaper reported on Wednesday. 

Many plants are being turned off or running at reduced rates as capped electricity tariffs combined with record coal costs demolish profits, traders and industry figures said. About 80 percent of China's electricity is generated by burning coal. 

A crackdown on unsafe mines, high global demand pushing up coal prices and a cold snap that shut roads and downed cables added to the problem, an official from the state regulator said. 

But, at its core, analysts said the problem was largely the result of Beijing's attempts to control inflation and avoid social unrest by controlling the price of some types of energy, like power, while allowing others like coal to be liberalised. 

"The main reason behind the power shortages this time is rising coal prices," said Henry Li, analyst at Core Pacific- Yamaichi, adding that power capacity is basically balanced. 

"I don't expect the government to raise power tariffs in the first half of this year, so the shortages will last till then." 

If brownouts do run that long, they will impact other markets. Aluminium Corp of China Ltd. has already shut down two plants because of the shortages. 

During China's biggest previous power crisis in the summer of 2004, when demand was around 40 GW above supply, a rush for individual generators and diesel to run them helped push up international oil markets. 

But though China is anxious to ensure that things run smoothly ahead of the summer Olympics, it is reluctant to move on power prices as it struggles to damp down inflation that reached an 11 year-high near the end of last year. 

Officials are caught between two policies -- fixed power tariffs, and coal prices freed to float several years ago. 

In theory the two are linked and tariffs should rise when coal prices climb more than a set amount, but Beijing has been reluctant to authorise increases. 

"Power shortages may persist until the mechanism linking coal prices to electricity prices is reactivated," said Li Jianwei, vice president of Shanxi Electric Power Association, a lobby group for power generators. 

"Shanxi's unusually low on-grid power price, coupled with rising coal costs has cornered many generating companies into a loss," he told Reuters. 

LOW SUPPLIES 

Major generators like Huaneng Power International, Datang International Power and Huadian Power International have not yet commented on the shortages. 

But stocks of coal are down nearly half from a year ago and only enough to cover eight days of generation, the official Xinhua agency said, quoting data from the State Grid. 

"Limited transportation capacity and recent natural disasters including snow and sleet all contributed to coal shortages," said an official with the State Electricity Regulatory Commission who asked for anonymity because he is not an authorised spokesman. 

A drought has hit hydropower output and worsened the impact of the coal squeeze in central and southwestern provinces. 

Beijing also cut coal production last year, even as international markets rose to record levels, by closing thousands of small, hazardous pits as part of a safety drive. 

Now the government has warned miners against making "chaotic" price increases, ordered railways to find extra wagons to transport coal for power generation, and requested the re-opening of any closed mines that meet safety standards.


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## hkskyline (Sep 13, 2002)

*FACTBOX-China's coal and power industries *

HONG KONG, Jan 23 (Reuters) - The world's number two energy consumer is facing its most severe power shortage ever, state media said on Wednesday, with tight coal supplies and poor profit margins shutting down around a tenth of its total capacity. 

Here are some facts about China's power and coal industries: 

* Installed capacity: At the end of 2007 China's capacity was 713 gigawatts (GW). Of this 554 GW or 78 percent was thermal power, and 145 GW or 20 percent was hydropower. Most of the remainder was nuclear and wind power. 

* Capacity increases: China added 91 GW of capacity last year. It is expected to hit 800 GW by the end of this year and 950 GW by the end of the decade. 

* Coal-power price link: From 2005, the government in theory allowed about 70 percent of any significant coal price increase to be fed through into power tariffs. But Beijing has sometimes been reluctant to apply the mechanism. 

* Recent power price increases: Beijing last raised prices in June 2006, when the average retail cost of electricity went up 0.025 yuan per kilowatt hour. 

Tariffs were also increased in May 2005, by an average 0.0252 yuan per kilowatt hour. 

* Coal price rises: China's coal prices for power generators under long-term contracts climbed about 10 percent this year, though some mines won even higer price hikes. 

This came after another 10 percent rise a year ago. 

* Coal demand: Demand is expected to rise to 2.76 billon tonnes in 2008, up from 2.62 billion tonnes in 2007. 

Sources: Reuters, China Electricity Council


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## hkskyline (Sep 13, 2002)

*Power shortages in Guangdong to ease, not end soon *

BEIJING, Feb 15 (Reuters) - Power shortages in China's manufacturing hub of Guangdong could begin to ease by the end of next month when supplies from southwestern provinces are restored, a senior government official said on Friday. 

Supply shortages had worsened from January 23 when trunk lines sending power from Guizhou province were disrupted by the worst icy weather in half a century. The harsh weather also damaged power networks in Guizhou and power supply to local residents had not been fully retored. 

Guangdong had cranked up all costly diesel-fired power generators since then to make up for shortfalls, but it was still not enough to meet local needs. 

"Guangdong was seeking more power from the State Grid Corp and other outside suppliers," said Zhu Hongren, deputy general director of the Bureau of Economic Operations under the National Development and Reform Commission, China's economic planner. 

"But the problem can only really be solved by adding supply capacity and strengthening demand management," Zhu told a press conference in Beijing. 

Guangdong purchased more than 2 billion kilowatt hours of power from Hong Kong in 2007 and more purchases were expected this year, a local government official had said. 

Zhu did not provide any estimate for power deficit in Guangdong, which state media quoted the local government as saying could exceed 8 gigawatts (GW) at peak times this year, or some 15 percent of its existing generating capacity, and far beyond the shortage levels in 2005. 

Guangdong aimed to have 80 GW of installed capacity by the end of this year, in which 18 GW would come from other provinces where Guangdong had invested in power plants.


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