context: Coal prices have continued to balloon despite a raft of government measures. As the country enters winter, the peak season for electricity demand, supply shortages are likely to continue.

Liaoning, Jilin and Heilongjiang have experienced power cuts due to coal supply shortages. Outages are expected to continue due to tight supply and high demand.

Power to parts of Shenyang, Liaoning, was cut from about 4:00pm to 8:23pm on 23 Sep 2021. Mobile phone reception, lifts and traffic lights all stopped working. Power cuts were enacted again for several hours at a time on 24-25 September.

State Grid Liaoning Electricity Supply Co. stated that power was cut due to

  • decline in grid capacity
  • lower power outputs from power plants due to high coal prices

On 23 September, a coal power plant in Liaoning was producing electricity to only 49.77 Hz, according to a worker. The load was too high and the plant was short on coal so it could not meet demand, leading to a drop in frequency. Limited coal production and distribution issues have led to high coal prices, the worker said. Therefore, the plant is operating at a loss, he added. Many coal power plants have stopped producing power for this reason, according to the worker.

China Electricity Coal Index shows coal prices at 1086 per tonne, nearly double y-o-y and up 56 percent since the start of 2021.

Industry must limit electricity consumption from 3:00pm to 9:00pm each day in Liaoning, commanded State Grid Liaoning on 24 September. Residents are urged to switch off power-hungry appliances from 5:00pm to 9:00pm each evening.

Heilongjiang’s steel industry has already been affected by power cuts. Power to two local mills has been restricted, prompting one of them to halve rebar production and the other to shut down its blast furnace for maintenance for 26 days.