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The Pearl River Delta, a center of "made in China," is in the midst of a severe power shortage. In some areas factories can only run four days a week. The Guangdong Provincial government has declared that the province is undergoing the most serious power supply crunch since 1978, when China started the reform and opening-up policy.
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The shortfall may reach as much as 12 million kw.
During 16 of the first 17 days of 2008, Guangdong implemented peak load shifting. After the Chinese lunar new year, as factories resumed production, the Economy and Trade Committee of Guangdong province estimated this year’s largest power gap to be 8 million kw. However, China Southern Power Grid soon lifted this number to 9.5 million to 10.5 million kw.
By February 26, the maximal power load for Guangdong’s centrally controlled network reached 40.56 million kw, and the maximal load during peak load shifting was 5.58 million kw. In January the power supply gap reached 7 million kw and in March this number will surge to 12 million kw as the load demand is estimated to climb to 49.5 million kw that month.
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Li Xiangming,the Vice Director of Guangdong Economic and Trade Commission, said that in the second half of 2008 when power transmission from the west is restored, the maximal load for the centrally controlled network will reach 63 million kw, growing by 8.87 million kw, i.e.16.4%, over 2007. Even under normal conditions, during the second half of 2008 the supply shortage will exceed 6.5 million kw and Guangdong will still be short.
The now chronic power crunch first occurred in Guangdong in 2003, and in 2005 the gap exceeded 6 million kw with the largest gap at 6.26 million kw, which was the most serious shortfall in 10 years.
This year, according to latest estimates, Guangdong’s power drought is certain to break the historical record of 2005.
This severe situation has forced industrial bases in the Pearl River Delta to launch peak load shifting plans and suffer brownouts. In some areas companies can only operate "four-on-three-off," i.e. only four days a week.
The Guangdong grid and Guangzhou Power Supply Bureau said the city’s shortage reached 1 million kw on February 18th. That same day, Guangzhou, to relieve the situation, officially launched a second-level emergency solution by shutting down all high energy consumption enterprises, and those with high pollution and laggard production capacity.
Meanwhile, the government of Dongguan, a giant among the Delta’s industrial engines, also imposed emergency measures and a "four-on-three-off" regime. The Dongguan Power Supply Bureau estimates that in March it will face a 3 million kw power supply gap which will put the city in a state of emergency and all industrial power may be shut off.
To cope, many enterprises are producing power themselves. "But increasing fuel prices raise extra costs to such enterprises," said a manager of Dongguan Electromechanical Devices Company.
Not only snowstorms to be blamed
Though Guangdong’s usual mild weather held this winter, the conditions in Central China played a big part in the crisis.
One direct cause was the damage caused by the winter glaze. Ice build-up pulled down many kilometers of power transmission lines in Southwest China, which will not soon be repaired. 6.3 million kw of power supply from Guizhou Province, Sanxia of Hubei Province and Liyujiang and Qiaokou of Hunan Province have failed to reach Guangdong, adding to Guangdong’s severe shortage.
According to plan, Guizhou is to transmit 6 million kw to Guangdong, and Sanxia and Hunan 3 million kw and 1.8 million kw, respectively, but it isn’t all getting through. Currently 25% of Guangdong’s power supply is scheduled to come from these southwest provinces.
Another problem, says Prof. Zhang Yao, member of expert panel of China Southern Grid, is lack of construction on the power network.
Zhang, who was involved in making the tenth five-year plan for the Guangdong branch of China Southern Grid, said that in recent years construction, especially that of substations, has encountered strong opposition in rural areas. Villages have sought high compensation from local governments. Zhang said that in Shanwei, Guangdong Province, for instance, much surplus power can’t be transmitted to other cities and some generators are even sitting idle.
While Guangdong’s total power needs grew by 13% in 2007, the flawed power supply structure and lack of smooth supply channels meant there was actually a power surplus of 3.5 million kw, while the maximal load during peak load shifting reached 6 million kw last year.
But perhaps the most serious cause of Guangdong’s power crunch lies in the dearth of newly installed capacity, which has fallen behind the province’s economic growth. In 2007 Guangdong’s GDP grew by 14.5% over the previous year, more than half again higher than the expected 9%. Also in 2007 small hot power plants in Guangdong with a production capacity of 3 million kw were shut down. According to the plan, another 3.8 million kw of capacity is to be shut down in 2008.
Guangdong is taking measures to cope with the situation. An emergency management system for coal transportation has been put in place. Coal stocks for 28 major power plants in the province have now risen to a level 500,000 tons higher than what is considered to be safe reserves. By granting subsidies and other economic means, Guangdong hopes to restore over 5 million kw capacity of idle power generation.
The Trade Committee of Guangdong Province has released an emergency plan, restraining power supplies to high consumption and high pollution industries to guarantee the demands of residents and public departments.
This year Guangdong will promote development of clean energies such as nuclear and solar power, wind energy and natural gas, and construct large scale power projects while shutting down small and inefficient power plants. The province aims to realize a total installed capacity of 80 million kw by the end of 2008.
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