China to shut coal power stations this year amid coal crisis

Xinhua Economic News Service reports that China will close more small coal-fired power stations in 2008, with the aim of saving energy and reducing greenhouse gas (GHG) emissions. The goal is to eliminate 13 million kW of such capacity, or about 30% more than the target of 10 million kw set last year, according to the National Development and Reform Commission (NDRC).

Last year, China shut 553 small thermal power generators with a total capacity of 14.38 million kWw, 44% above target. The State Council, or the Cabinet, has set a target of closing 50 million kW of thermal power capability from 2006 to 2010. As we have noted in International Mining before, in many ways, China is setting a great example in the efforts to reduce reliance on inefficient coal plants. While it is closing these plants, it is replaciung them hith high technology clean coal facilities.

Zhang Xiaoqiang, Vice Minister of the NDRC, said highly efficient, ecologically friendly generators, with a total capacity of 100 million kW, had offset reductions caused by last year’s closures. He noted that any current power shortfall was caused by a combination of increased demand driven up by the adverse weather as well as coal shortages, which had shut power stations with an aggregate capacity of up to 40.99 million kW, or 7% of the capacity of China’s thermal power plants.

Large thermal power generators, each with a capacity exceeding 50,000 kW, would replace small coal-fired generators to help save 18.8 Mt of coal and avoid emitting 290,000 t of sulphur dioxide and 37.6 Mt of carbon dioxide every year, according to the NRDC.

The State Electricity Regulatory Commission (SERC) said on Monday that coal reserves stood at a little more than 21 Mt, less than half of the normal reserves. Nearly 90 power plants, which accounted for more than 10% of the national gross installed capacity, had less than three days of coal reserves. Bad weather and rising passenger rail traffic before the Spring Festival, the most important Chinese holiday, have hampered coal transport. Only an average of less than 25% of the daily demand for coal shipment by rail has been met, according to the Ministry of Railways.

Coal prices had risen nearly 20% month-on-month, said the China National Coal Association, in a report released on Monday. Meanwhile, coal delivery costs in coastal regions had surged more than 50% in the past six months and were expected to continue rising. China National Coal Corp, the country’s second largest coal producer, expects prices to remain high this year.

The Railway Ministry warned on Monday that the closure of some coal mines during the Spring Festival next month, when workers would be on holiday, would further exacerbate power supply problems. The problems have been building since the dry season months ago. Hydropower output declines during dry seasons and coal-fired generation must make up the shortfall, meaning that it’s harder to build up coal stockpiles.

Strong domestic demand drove up coal imports by 34% to 51.02 Mt last year, while exports totalled 53.17 Mt. Net exports thus shrank to 2.15 Mt from 82.9 Mt as recently as 2003, according to customs statistics.