Shanxi, Liaoning coal plants resume operations

Coal power plants in Shanxi and Liaoning provinces that had shut down due to insufficient coal stocks have resumed operations, Reuters reported. By coming back online, the plants have reduced power shortages in Shanxi to 1.5 gigawatts (GW), down from a forecasted maximum shortage of 5GW. Coal inventories now stand at 10 days. According to state media reports cited by Reuters, Liaoning has lifted power rationing due to improving coal supplies. It is unknown whether Shanxi has taken similar action. Tight power supplies depressed China’s industrial output growth in the January to July period this year to their lowest levels in 19 months. Beijing imposed caps on coal prices to encourage a stable power supply – low or no profits at power producers discourage production and investment in new generation capacity – but enforcement remains a problem. China has set up a high-level task force to cope with power shortages, widely reported as the worst in four years.