Page 6 - AsiaElec Week 10 2022

AsiaElec COAL AsiaElec

Beijing to increase

coal output, build

national reserves

CHINA THE Chinese government last week revealed its accurate figures are notoriously hard to gauge.
latest plans to ensure no repeat of late 2021 to Yet, despite efforts by Beijing to move towards
early 2022, when there were power cuts across an eventual net-zero goal prior to 2060, “coal
large areas of the country; plans centred around will serve as the main energy source for a con-
an increase in domestic coal output and expand- siderable period” the NDRC indicated via local
ing storage facilities at strategic locations across Chinese media in a nod to the overwhelming
the nation. reliance on fossil fuels to provide power to Chi-
Speaking via prepared statement during the na’s 1.4 billion population.
National People’s Congress, China’s economic At present more than half of all electricity
planner, the National Development and Reform supplied in China is generated by coal power
Commission (NDRC), highlighted its primary stations.
goal of increasing deployable storage facilities to The NDRC statement also raised ongoing
5% of local consumption levels in key areas. and possible future issues with coal supply by
The NDRC will also work towards improv- promising the Congress it would be upping over-
ing future guarantees prioritising domestic coal all domestic production capabilities and storage.
transportation routes in addition to guarantee- Through much of the second half of 2021,
ing coal pricing systems. Beijing gave the green light on large numbers of
Medium and long-term trading of Kcal ther- newly proposed coal mining sites in addition to
mal coal will, it is thought, be set in the range of permitting increased output at current facilities;
570 to 770 yuan per ton (US$90 - 122) at Qin- moves that failed to prevent supply shortages
huangdao Port, east of Beijing and site of one of last year, albeit with the intent of guaranteeing
China’s main coal ports. no repeat next winter.
The NDRC also proposed controlled pricing Such was the political fallout on the back of
systems in leading coal production areas in Inner last winter’s power cuts, Li Keqiang, the Chinese
Mongolia, Shaanxi, and Shanxi, all prominent Premier offered a personal promise that there
coal mining areas to the north and west of the would be sufficient electricity across the residen-
capital. tial and industrial sectors this year.
According to Wan Jinsong, an NDRC offi- In its own reference to the cuts of 2021, the
cial, this is move “(P)roposing a resonable range NDRC stressed that by enabling an open frame-
is not to adopt government pricing for coal, but work linking coal produced domestically, and
to establish a range regulation mechanism based eventual electricity supplies by way of mar-
on market-formed prices”, a method seen as key ket-forces, prices in China will stabilize, which
to balancing the roles of government and market in the long-term will provide for a more solid
forces in a bid to avoid overly dramatic fluctua- platform for wider economic expansion.
tions in coal futures. The NDRC went on to say “We will advance
Coal output achieved a record high of 4.07 the development of major (reserve) projects
billion tons in China in 2021, even on the back (and) build up the momentum of increases in
of heightened safety measures implemented to both reserves and output” in its statement.
avoid all too frequent reports of coal mining acci- Along with increased coal reserves, Beijing is
dents; over 330 accidents had been reported by working across the board to facilitate large scale
December 2021 according to some sources, lead- storage of gas and oil reserves.it™
ing to reports of hundreds of deaths, although

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