What’s new: The year 2021 marked the worst power crunch in a decade for Guangdong, southern China’s manufacturing hub, where authorities rationed electricity for a total of 66 days, according to the provincial government.
The maximum load for Guangdong’s power grid surged to record highs seven times during the year. Demand peaked in September at 141 million kilowatts, 11% higher than a year ago, said Zheng Renhao, director of the Guangdong Development and Reform Commission.
Generators were squeezed by rising production costs amid skyrocketing coal prices, according to Zheng. The Guangdong government ordered rationing of electricity for businesses starting in mid-September, forcing companies to take turns halting production.
The background: Guangdong provides a snapshot of a sweeping power crunch that hit China over the past year as surging coal prices discouraged electricity generation to support reviving industrial demand.
According to an October report by Zhongtai Securities Co., the maximum electricity load of China’s two state-owned grids reached a five-year high in 2021, with peak load hitting 1.2 billion kilowatts in July.
Although the nationwide power crunch has eased since late October, analysts said supply will remain tight in 2022.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
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