The China Electricity Council (CEC) has urged coal producers and power suppliers to cooperate to cope with expected power shortages during the second half of 2008.
These shortages could reach 15 million kw per day, mainly due to tight thermal coal supplies, the CEC said in a website notice on Friday.
The CEC represents power producers.
Thermal coal prices have risen amid increasing demand from coal-fired power plants, which supply 80 percent of China's electricity.
Prices at the coal market in Qinghuangdao, Hebei Province, a major coal supply center, exceeded 1,065 yuan (about 155 U.S. dollars) per tonne in July, up 115 percent year-on-year.
Thermal coal use this year could surge 11.5 percent year-on-year to about 1.6 billion tonnes, indicating the possibility of tighter supply, said the CEC.
Power producers "have felt the pinch of soaring coal prices. But they found it difficult to get high-quality thermal coal, most of which has been taken up by other industries," said coal expert Li Chaolin, of Coalmarketweb.com, a coal information site.
The CEC suggested that coal producers and power plants take advantage of China's efforts in energy reform. They should cooperate in balancing supply and demand, especially over the long term, it said.
The China National Development and Reform Commission, the top economic regulator, raised retail electricity prices by 0.025 yuanper kw/hr on July 1, to about 0.5 yuan per kw/hr. But the increase will only cover 15 percent of the losses at coal-fired power plants, according to market experts.
The top five power producers' combined profits were more than halved in the first half because of higher coal prices.
In response to some experts' views that a tight coal supply was mainly contributed by China's move in closing small scale coal mines nationwide, the State Administration of Work Safety (SAWS) deputy director Wang Dexue expressed his disagreement on Saturday.
"China shut 11,155 small coal mines by 2007, which involving a maximal annual output of 200 million tonnes. However, new-installed producing capacity was far more than that amount." said Wang, "So small coal mines shutdown should not be blamed for the tight coal supply."
The country was trying to explore and construct more large scale coal mines to ease the problem. Coal mine workers' safety was a priority, he said.
According to the SAWS's figures, 1,013 coal mine accidents happened in China in the first seven months this year, claiming 1,631 lives, representing a large decline from 1,368 accidents, and 2,154 deaths during the same period last year.
Source: Xinhua
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