According to the latest updates, increase in Hebei province’s electricity demand amid heatwave in China has led to power shortage in China’s top steelmaking province. As a result of this power shortage, some steel mills in the Hebei province have been ordered to curb their operations.
As per the Southern Hebei division of State Grid Corporation of China, power grid loading in late July in southern areas of Hebei reached 36.57 gigawatts (GW) which is the highest on record.
The seven major cities in Hebei province including that of Handan and Changzhou has been issued an alert on potential power shortage by the power grid company. It has asked industrial companies such as steel mills, ceramic makers and oil field operators to restrict activities during peak hours.
Reports suggest that Hebei has lifted the power shortage alert to ‘Orange’ which is second-highest in China’s four-tier warning system. Under orange alert, industrial plants can only work from 11 am to 7 pm, typically off-peak hours for residential use.
With the power rationing that has been happening since last summers, about 30% of output capacity has been affected, revealed a source working with the company which has a capacity of over 5 MnT per year.
Power shortages typically happen when consumption surges over a short period and there is not enough transmission capacity to deliver power to consumers.
State Grid’s Hebei division on Monday also scheduled power outages in Tangshan, in Hebei as well and China’s top steelmaking city, for the coming three days, according to notices from the power company.
Hebei produces about a quarter of the country’s total steel output and is already in the front line in China’s ‘war on pollution’. The province has produced about 191 MnT of crude steel last year but plans to slash steel capacity by 50% in some of its major cities by 2020. It has closed more than 60 MnT of steel capacity over the 2013-2017 period and aims to cut a total of around 40 MnT of steel-making capacity from 2018-2020.
The province had 286 MnT of annual steel capacity in 2013 and is targeting to bring that figure down to 200 MnT by the end of the decade. The production cuts due to power shortage will also support Hebei province to achieve its capacity cuts target.
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