China Power Shortage Problem

Cost is certainly an issue. It's not viable to run a smelter using diesl fuel (for example). But even in countries such as Australia such things do happen from time to time for either practical reasons (tecnical issues temporarily shutting the smelter or a need to meet contracted deliveries) or political reasons. It's not profitable, but it happens and I'd guess that it's even more likely in China.

But for industries where electricity is a relatively small part of total costs it's not such an issue. Diesel isn't profitable to run a smelter, but it's certainly more profitable burning diesel than closing shops or a call centre.

Either way, the bottom line is that hydro in China (or anywhere else) is a primary energy source along with coal, oil, gas, nuclear, wind and biomass (solar, geothermal etc are also primary energy sources but their usage is too trivial to be relevant).

To the extent that production of hydro in China goes down due to drought, demand for some other energy source goes up. In practice, the workable alternatives are possibly coal (running existng plants harder) or oil (hatily built temporary power stations or portable generators). That's because those two fuels are transportable internationally, there is existing infrastructure and so on. Everything else has too many difficulties with needed infrastructure, lead times, getting enough of it where it's needed etc.

For anybody interested in looking at investment i found a list of power company's in China on Wiki. The power story in China ia quite similar to India except in India they have a huge portion of the population steal electricity so once the government cracks down on that you could see quite a upside in power stocks in these markets... I believe 8% of China's power produced is stolen and around 37% in India.

B

Beijing Jingneng Thermal Power

C

China Datang Corporation
China Guangdong Nuclear Power Group
China Guodian Corporation
China Huadian Corporation
China Huaneng Group
China Power International Development
China Power Investment Corporation
China Resources Power


C cont.

China Shenhua Energy Company
China Southern Power Grid Company
China Yangtze Power
CHINT Group Corporation

D

Datang International Power Generation Company

G

GD Power Development Company

H

Huadian Energy Company Limited
Huadian Power International
Huaneng Power International


P

Panjiang Coal and Electric Power Group
Templateower companies of China
Templateower grid corporations of China

S

Shenergy Company
Shenergy Group
Shenhua Group
Shenzhen Energy
Sinohydro Corporation
State

Smurf1976 said:

Cost is certainly an issue. It's not viable to run a smelter using diesl fuel (for example). But even in countries such as Australia such things do happen from time to time for either practical reasons (tecnical issues temporarily shutting the smelter or a need to meet contracted deliveries) or political reasons. It's not profitable, but it happens and I'd guess that it's even more likely in China.

But for industries where electricity is a relatively small part of total costs it's not such an issue. Diesel isn't profitable to run a smelter, but it's certainly more profitable burning diesel than closing shops or a call centre.

Either way, the bottom line is that hydro in China (or anywhere else) is a primary energy source along with coal, oil, gas, nuclear, wind and biomass (solar, geothermal etc are also primary energy sources but their usage is too trivial to be relevant).

To the extent that production of hydro in China goes down due to drought, demand for some other energy source goes up. In practice, the workable alternatives are possibly coal (running existng plants harder) or oil (hatily built temporary power stations or portable generators). That's because those two fuels are transportable internationally, there is existing infrastructure and so on. Everything else has too many difficulties with needed infrastructure, lead times, getting enough of it where it's needed etc.

Click to expand...

Yes. I note you limit the workable alternatives to coal & oil - not gas. There does appear to be some significant issues currently regarding reliable gas supply as well...

Gas Power Plants Lacking Supply While China Being in Electricity Shortage

June 5, 2011

Analysis by: GLG Expert Contributor
Analysis of: 百度搜索_浙江省的半山电厂
Published at: www.baidu.com

Summary

While widespread electricity supply shortage in China has blown some ripples in other energy markets, in particular, resulting in extra diesel demand for plant backup power generation, the natural gas market has received little affected. There seem no extra gas supply sources and no incentives for gas-fired power plants to raise plant operations to make possible contributions to help relieve electricity supply shortage.
.....
In fact, gas-fired power plants entirely relying on natural gas supplies from gas transmission trunk lines and LNG import terminals have never been operating properly since the very beginning. When gas supply quotas being allocated to power plants are limited, they are even squeezed by rapidly rising gas requirements of other sectors particularly residents and other city gas consumers. In addition, higher gas costs and strictly controlled domestic electricity fed-to-grid prices have put majority of gas-fired power companies into operating losses. In an estimate, gas-fired power plants in China are operating at below one third of the designed capacity on average throughout the country. As a result, there are no extra gas supply sources and no incentives either for gas-fired power plants to raise plant operations to make possible contributions to help relieve electricity supply shortage.

Click to expand...

http://www.glgroup.com/News/Gas-Pow...hina-Being-in-Electricity-Shortage-54250.html

Hmmm. Confucious say...?

nukz said:

For anybody interested in looking at investment i found a list of power company's in China on Wiki. The power story in China ia quite similar to India except in India they have a huge portion of the population steal electricity so once the government cracks down on that you could see quite a upside in power stocks in these markets... I believe 8% of China's power produced is stolen and around 37% in India.

Click to expand...

Then again, if a huge proportion of the population (mostly the desperately poor?) in India are currently stealing 37% of total electrical power output surely "cracking down" on them and forcing them to pay for any more power (with what - most have little or no money so maybe in peanuts?) will result in mass unrest across the country?

Hmmm. Mahatma Ghandi say....?

Aussiejeff said:

Then again, if a huge proportion of the population (mostly the desperately poor?) in India are currently stealing 37% of total electrical power output surely "cracking down" on them and forcing them to pay for any more power (with what - most have little or no money so maybe in peanuts?) will result in mass unrest across the country?

Hmmm. Mahatma Ghandi say....?

Click to expand...

If they did it tomorrow your right, but gradually if the whole India superpower story plays out then wealth will slowly trickle down to the poor but deciding when to invest is very hard as what i'm describing might be 50 years away.

Aussiejeff said:

Yes. I note you limit the workable alternatives to coal & oil - not gas. There does appear to be some significant issues currently regarding reliable gas supply as well...

Click to expand...

If they already had access to sufficient gas then using that for temporary power stations would be a no brainer really since they're almost as easy to construct as diesel and massively cheaper to operate. But they don't have the gas available to run them it seems...

I guess the key point here is that oil is always the fuel of last resort for power generation. It's by far the most expensive fuel, but it is in practice available anywhere as long as you can get a ship or even trucks in. When all else fails, burn oil...