Due to the impact of unusual natural disasters this year as well as the bottleneck in transportation, some regions are experiencing a shortage in their supply of power-coal, and demand side regulation has to be applied. The State Council of China has adopted a series of administrative and economic measures to ensure power and energy supply.
In order to alleviate the shortage in the power-coal supply and to ensure stable operation of the economy, the National Development and Reform Commission (NDRC) coordinated a safeguard mechanism between the coal, power, oil, gas and transportation departments. Related government departments actively organized the increase in coal production and encouraged large coalmines with sound technical conditions and management to increase their production of power-coal.
In the first seven months, the coal output of Shenhua Group, the largest coal producer in China, reached 155.12 million metric tons, an increase of 15.8% year over year, including 130.11 million metric tons of power-coal, an increase of 22.7% year over year. In the first seven months, the nation's volume of coal shipped by railway reached 1.02 billion metric tons, an increase of 98.42 million metric tons year over year. Of this, the freight volume of power-coal reached 690 million metric tons, an increase of 120 million metric tons, or 21.7% year over year.
Price leverage is applied to regulate the relationship between demand and supply. In order to alleviate the pressure of thermal power and petroleum enterprises in cost, the NDRC gradually adjusted the price of electricity and product oil. While strictly controlling the export of coal and product oil, the NDRC also intervened in the pricing of power-coal.
In addition, departments such as the NDRC also strengthened demand-side management to ensure the use of electricity in an orderly and economic way. Related departments also strengthened the supervision of power-coal supply and transportation contracts to improve their performance rate.
Through the above efforts, the nation's coal production and power-coal supply status has improved. As of August 18, the stockpile of coal in direct-supplied power plants reached 23.42 million metric tons, which is equivalent to 12 days of demand and an increase of 4.02 million metric tons compared with the stockpile held at the end of July.