China's state power grids to prioritize residential supply, boost fuel stocks

China's two largest state-owned power grid companies, State Grid and China Southern Power Grid, said they will ensure power supply to residential users and boost fuel stocks of both coal and gas amid the ongoing power rationing in several provinces, according to statements issued late Sept. 27.

The companies, which distribute most of China's electricity, were responding to the current power supply situation that has seen unexpected cuts to residential usage due to reasons like soaring coal and gas prices, unfavorable weather curbing renewable power supply, and pressure from policies to tighten control over energy consumption and emission-intensive coal projects.

"State Grid will utilize all measures to ensure sufficient power supply, guarantee to meet residential needs of electricity, minimize the possibility for power outages and stick to our foundation of supporting people's livelihoods, social development and safety," State Grid said in its statement.

State Grid proposed countermeasures in its statement to cope with the current situation, with plans to coordinate resources, take advantages of electricity networks and optimize the potential of inter-regional power transmission.

In addition, State Grid's statement also emphasized the government's requirements on orderly power use must be strictly enforced, supervision on power use must be strengthened, and current emergency plans must be improved.

In China's Northeast region, which is served by State Grid, industrial companies did not strictly follow the government requirements for limiting power use, and local power grid distributors lacked sufficient experience in managing rare and extreme situations of power shortages, market participants said.

This became one of the key reasons behind the region's failure to manage peak demand and eventually cut residential power supplies, which resulted in severe criticisms from the industry and public backlash, according to local media reports detailing the power situation in Chinese provinces.

China Southern Power Grid's statement also highlighted the importance of securing residential power supplies, and proposed other countermeasures, including expanding coal and gas stocks, customizing emergency plans for the five southern provinces served by the company, as well as enhancing hydro-pumping energy storage capacity to cope with renewables' intermittency issue.