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The Impact Of Electricity Limiting

  • October 20, 2021

Recently, many enterprises have received a short message notice from the State Grid, asking them to turn on two to stop five, turn on one to stop six, and turn off the peak.  We know that September and October are the key time for enterprises to produce, but why would they limit electricity production at the moment of gold, silver and gold?  The main reason is the shortage of coal, resulting in a tight electricity supply.  From the power source structure, China's thermal power, accounting for nearly 70% of the total power generation, and thermal power is basically coal burning.  China is the world's largest coal importer. Due to repeated outbreaks abroad, coal imports are restricted.  At home, the economy is recovering this year, especially in the manufacturing sector, faster than expected.

This has greatly boosted the demand for energy. Against the background of short supply and demand, the price of coal has risen by more than 60% this year, setting new record highs. As we all know, 70% of China's electricity is generated by thermal power, which is very dependent on coal.  At present, the feed-in price of thermal power is more than 40 cents, but the generation cost has nearly reached 60 cents.  In other words, coal-fired power plants lose more than 10 cents per kilowatt of electricity.  Why not increase the supply of coal instead of rationing electricity, one might ask?  China is the world's largest carbon emitter. In 2020, China's carbon dioxide emissions accounted for 30.93% of the total global carbon dioxide emissions, accounting for the largest proportion.  The large-scale utilization of coal is the main source of carbon emission in China.  To achieve peak carbon by 2030, the promise of carbon integration by 2060, energy reduction and low-carbon transition will reshape the energy mix.  For small and medium-sized enterprises, industrial transformation, from traditional energy to new energy-saving production, improve production efficiency, increase the added value of products, is a leading trend in the future.

At this moment, power rationing will force enterprises to reduce production, production, the demand for raw materials down, down demand.  High international prices for raw materials fell.  After the production cut, the quantity of export commodities will be reduced, and the price of commodities will go up.  Therefore, electricity rationing plays an objective role in protecting small and medium-sized enterprises.


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