China Limits Power Supplies as Demand Surges on Cold Weather

China is limiting power supplies in some provinces as cold weather and the country’s industrial recovery boost demand.

Power supplies are being cut to some industrial and commercial customers in Hunan and Jiangxi provinces, where demand has jumped by at least 18% over the previous year, Zhao Chenxi, an official with the National Development and Reform Commission said at a Monday press conference. Residential supplies haven’t been affected.

The outages are coming amid soaring costs for coal and natural gas in the world’s biggest energy consuming market. The economic recovery from the pandemic has boosted demand from factories, while a La Nina weather pattern is bringing colder-than-normal temperatures to the region.

Coal supply issues have exacerbated the problem, with transportation constraints contributing to the Hunan and Jiangxi outages, according to Zhao. A spate of deadly mining accidents in recent months have led to increased safety inspections in some region, reducing output. Some provinces are being asked to increase production, Zhao said.

Several other regions, including the cities of Beijing and Chongqing, also face tight electrical supplies after freezing temperatures caused grid problems that require maintenance, State Grid Corp. of China said in a statement.

The supply crunch provided a windfall for China’s power producers and makers of electrical equipment, which surged Tuesday. Jiangxi Ganneng Co. jumped as much as 8.4% to the highest since April 2019, while Datang Huayin Electric Power Co. advanced as much as 7.4%. Baoding Tianwei Baobian Electric Co., which makes equipment like transformers, rose by the 10% daily limit in Shanghai.

©2020 Bloomberg L.P.

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