Coal and Gas Prices Have Doubled Which Contribute to China Power Outages

China has been rationing power because of coal and gas shortages. There are reports of multiple power outages to residences for four days in a row. Households have had to restrict AC usage.

There are many factors contributing to a perfect storm of increased demand, high energy prices and reduced supplies.

China’s heatwave, shortages with Coal India and power plants, high freight rates, increased appetite in the rest of Asia, tightness due to Indonesian rains, Hurricane Ida in the U.S., and COVID reduced supply and increased demand.

China has also had a 30% reduction in hydroelectric power.

Usually, China absorbs power shortages by restricting commercial companies.

The power shortages are hitting companies. Dozens of other companies, including a parts supplier to Tesla, were also told to halt production this week.

Global prices for coal and natural gas have more than doubled.

Natural gas prices are at seven-year highs in the U.S. and record highs in Europe and Asia. US natural gas futures extended a rally to above $6.1 per million British thermal units in September, a fresh high since February of 2014.

European electricity prices have climbed to their highest levels in over a decade in recent weeks, rising above 100 euros per megawatt-hour in many markets. In Germany and Spain, for example, prices in September have been around three or four times the averages seen in 2019 and 2020. This increase has been driven by the surge in gas, coal and carbon prices in Europe.

Chinese utilities are only permitted to pass along 10% price increases. They have not yet been permitted to pass along more price increases to consumers. This makes for a less flexible response the shortages and price increases.

China is prioritizing building up supplies of coal for winter heating. A shortage of coal for home heating would result in people freezing to death.

Pivot to Nuclear District Heating

China would be less dependent on coal for heating in northern China if they had more aggressively shifted to nuclear district heating.

Nextbigfuture had written in 2019 about China considering the development of deep pool nuclear reactors (DHR-400 and NHR200-II) and district heating to replace coal powered home heating.

District heating has been used for decades in Stockholm, Sweden where pipes move hot water to heat an entire city.

This should have played to China’s strengths in rapid construction. However, China only seems to have about 1 million square meters of housing heated with nuclear district heating. They captured the excess heat from Qinshan AP1000 reactors for heating in Haiyang. There also seems to be test heating using a NHR200 reactor.

Hydroelectric power, coal and natural gas have proven to be insufficient in the current energy situation.

Aggressively adding nuclear energy for heating would make for a more robust and reliable energy system.

Solar power has a large efficiency penalty when generating heat.

SOURCES – World Nuclear News, Trading Economics, NEI Magazine, Aljazeera, Reuters
Written By Brian Wang, Nextbigfuture.com

41 thoughts on “Coal and Gas Prices Have Doubled Which Contribute to China Power Outages”

  1. It will be Fall in another two days. The demand for air conditioning will drop and the demand for heating won't rise for another month or two. The Chinese government should see if more conservation measures could be useful.

    As for district heating, the waste heat from any power plant can be used for district heating. Really only economical is dense urban setting. For suburbia, heat pump units are probably best.

  2. Just storage alone is more expensive than electricity from just about any other source. Terrestial solar is negative demand shite that can't run the grid without being joined at the hip with natural gas. And space solar doesn't even seem to make sense if launch costs are free.

  3. Low grade heat (space heating) with a heat pump has a COP of 3 – 4. Even with gas it is more efficient to make electricity and use a heat pump rather than just burn it for warmth. Heat pumps would be used more if there wasn't a large capital cost to drill water wells.

    Natural gas in Sweden isn't really a thing and that makes heat pumps very common where district heating is too expensive or unavailable. You typically drill a couple of water wells and assign them each to different purposes (drinking water or geothermal) after you have drilled them.

  4. BTW why doesn't tradingeconomics.com label the y-axis on their graphs?
    I would guess those are price of gas & coal over time, but it would be nice to know the currency & the unit of gas or coal.

  5. Not sure what your point is. Nuclear is good and reliable? Solar and wind are intermittant and less than ideal for many regions? Yep.

    But the nature of solar and wind farm investment have meant they are being built out fast, while nuclear investment is largely stagnant or declining.

    SMRs might eventually change that – but probably not within the next 10 years because most investors will want to see successful and safe projects operating profitably before starting up new projects.

    And by 2030, renewables will have reshaped electricity markets even more in a way that makes it hard for incremental nuclear construction to be profitable.

  6. True, Poland's been talking about building nukes almost since they aborted the ones the Soviets were building for them. They just never put the cash on the barrel.

  7. The asymptote for renewables gets a lot steeper, a lot faster, than for nuclear. Nuclear has a capacity factor of about 90% for an individual power plant, and where there are a number of plants, they can supply 80 to 100% of their nameplate capacity all the time. Solar and wind vary by site, from only about 12% to nearly 50% c.f., but because panels and turbines over large areas all go on strike simultaneously, they can only work if combined with a very flexible power source capable of quickly cycling from zero to near 100% of total demand. In a very few places that's hydro; usually it's gas. Or worse, coal. Solar has only reached about ten percent maximum of any grid; wind has got to 40% in a few small areas, but only where they can export the surpluses and import when it's calm. Nuclear has reached 80% of total demand in France, Ontario, and Lithuania, and over 50% at times in Ukraine, Belgium, Hungary, Sweden, New Jersey and Illinois. Solar costs are climbing now, not falling, and European countries that put their money on wind have just been rewarded by weeks of calm.

  8. New Zealand deserves Taiwan more than the Dutch – the natives there are cuzzy bros to our Maoris, and used to discourage Dutch and Chinese settlement by headhunting.

  9. Nuclear would have been fine – but we've put it off too long. If the US started a massive build-out program now, the first resulting power wouldn't show up for 10+ years.

    My guess is that whatever new nuclear we actually get built within the next 10 years will be more than balanced by decommissioning of old reactors.

    And in 10 years, the economics of nuclear power vs renewables will be even tougher.

  10. To save face, China could import coal from India at a premium price … and then India could make up the loss by importing coal from Australia. That way no evil Aussie coal lands in China.

  11. Maybe they are thinking long-term and figure the price of gas is going to skyrocket over the next decade. Don't sell your gas for $6 now if you can get $100 for it in 2030 to finance the Dutch reclaiming their traditional ownership of Taiwan.

  12. Yeah, we are always hearing about plans to build stuff.

    I'm not taking it seriously until work actually starts. Real work, with earth moving equipment, not just powerpoint slides.

    And I'm not regarding it as a done deal until the electrons are flowing.

  13. India is a net importer of coal. Including heaps from Australia.

    Chinese importing Indian coal (if that's what that means) is probably just a way to indirectly import from Australia while maintaining face.

  14. If you're using nuclear for heat in winter, you might as well use it for power all year, as well – the two thirds of energy produced by light water reactors would be waste heat otherwise, and you might as well use the plant in summer too. Anyway, nuclear district heating is already in place in half a dozen countries. Earth to earth power beaming hasn't even been demonstrated as a kettle-boiling prototype. See Goat Guy above – how many ginormous reflector satellites do you need before this 'cheap' power is any more reliable than current solar ?

  15. James Lovelock, who invented Gaia, is all in for nuclear. Some of his intellectual progeny haven't got the message.

  16. I used to work for a power generation and transmission company (about 20 000 km of transmission lines) and the reason *we* didn't allow people do build under the transmission lines was that people would eventually build up enough that, in a hot day, the dielectric constant of the air might get low enough that we'd get a 345 kV spark towards a shack. Hopefully there would be no casualties, but it was anyway a knocked-out power line which might necessitate people to scramble to fix a problem which might not otherwise need to happen.

    Certainly we had a lot of sugarcane farmers setting fire to their own fields just before harvest to drive the snakes away, and the rising hot air was enough to allow the high-tension phases to short out with each other: suddenly half a million people are in the dark for two or three hours.

  17. Was China backfilling with indian coal though? There was the brief blurb above about Coal India, so that made me assume that was the case.

  18. Earth to Earth beaming …

    Ever wonder why people (at least in the USA) are not allowed to build domiciles under high tension power lines? They don't fall down very often, so that's not it. No, rather, it is because they're considered long-term-worrisome from a ULF (ultra low frequency) EMF (electromagnetic force) point of view. That, and the utility companies don't want domestic building fires to threaten the power supply. Probably lawsuits, too. All that.

    E2E beaming seems to suffer from similar woes, and different ones too. Ideally, the 'beam reflectors' would be modestly low orbiters, because above LEO (i.e. in the lower part of MEO or mid-elevation orbit, at 1000 km or so), the long term atmospheric friction is so low that an orbiter might conceivably have many hundreds of years of no-power-needed orbital durability. Certainly longer than 'the program.'.

    However, such orbiters still traverse horizon-to-horizon in a Spirograph pattern (assuming oblique, but not polar-oblique orbits). Coverage. So, to get power between here (where made) and there (where needed), seems to require a WHOLE LOT of synthetic aperture transmitters and even more receivers.

    Just one cool clear night, go outside and let your eyes get adjusted to the dark. Soon, near dusk or dawn, you'll spot satellites chugging along. Time them. about 8 minutes, horizon to horizon. Well … tracking horizon AND readjusting every 8 mins, 24 h/day. Yah. NAH.

  19. Criswell has a nice solution, burn the gas where it is and power beam it to anywhere needed. Avoid the tanker and tanker fuel completely. "If they had done this," we would be doing Space Solar already, on the way to O'Neill free settlements. Not China.

  20. If we get fusion to work (using either plasma magnetic containment or lasers) it will cost much more than fission. It is a 70 year boondoggle. 
    We have fission that does everything we wanted from fusion. It can even eat the waste of previous generations of reactors. We need to build molten salt thorium reactors. Just a few at first, to work out the bugs. Does not really meltdown as it is already molten. And does not blow up, as it is not under pressure. Far less waste, and what there is, is fast to decay, and useful for radioisotope thermoelectric generators for spacecraft and space outposts.

  21. You are reading the story over optimistically for nukes. It sez use nukes for heat ("cold winters"), to free up stuff for electricity, not to use nukes for electricity. That is thermal electricity, too expensive from the start, getting worse as solar power beaming comes in.

  22. At least electricity from heat is no longer considered. Even with free heat, the boil water process alone costs more than solar total. This is true no matter where the free heat comes from, fission, fusion, geothermal, etc. With Earth to Earth power beaming, the advantage of intermittency causing overbuild of wind and solar earth collectors becomes clear. Search Criswell LSP find searchanddiscovery link, see ppg 12-13 for basic idea.

  23. The difference is that in electrical production, gas is at best around 60% efficient. So, solar has a lot of advantage in electrical generation. However, when used for heat, gas too is around 99% efficient. The losses are mostly light, which is not very bright burning natural gas.
    So, solar loses its advantage that it has in electrical generation. So, the preference would be for gas to be used for heat, and solar for electrical, because you get more for your investment.
    And if you are trying to get heat from solar, other methods easily beat photovoltaic. Solar water heaters are not bad. Solar reflectors heating oil can make a lot of usable heat. But we tend to use them in the desert, because they need direct radiant light, and no one needs extra heat in the desert when the sun is up. So that is just used to generate electrical power which loses advantage over just having simple PV instead.

  24. I have probably said it many times but the US should help with purchasing new natural gas tankers (built wherever it is cheapest), for export, our producers can make just as much profit selling abroad per cubic foot, as they do here, or more. Maybe the tankers could be owned and operated by the US government. Then more US jobs and you know they will be used in our national best interests. It also would not be a "gift" to the gas industry.
    We have enormous reserves. Better that the World uses natural gas than coal. Wind and solar can't displace everything right away. It takes time. Better for the environment that it is natural gas rather than coal. 
    If they had done this, then when the pandemic hit there would have been more places to put production, and less would have had to be shut down. We would be sitting pretty now, selling to Asia and Europe. Might even have an overall trade surplus.

  25. Why does solar power have a
    “Large efficiency penalty” when generating heat?

    If All of the power generated by solar panels makes electric heat then it is 100% efficient?

  26. Its looking like Eastern Europe will build NuScale reactors and probably export the power to non-France-Western-Europe.

  27. I will say this about fission: while it's not the safest, I think it's leaps and bounds beyond coal or gas (not geothermal, though– that's its own conversation; what would you do with a super volcano, if you could?). And safety advances in fission continue to he made.

    That said, though, fusion would [supposedly] be leaps and bounds beyond fusion in terms of efficiency, output and safety. That doesn't mean we end up with a star in a box for every home, because that feels like overkill (though backups are nice). But I think it's just the next logical step after fission.

    And hey, after we figure out fusion, we get to move on to the next, even more efficient power source. And I don't even know what that'd look like.

  28. If only there was a reliable low carbon energy source that could help them survive the cold winters.

    Oh wait, there is, nuclear works perfectly fine as a baseline power source. But alas most of them killed it at home in the altar of Mother Gaia, who demands human sacrifice.

  29. Runaway coal prices and problems with distribution?

    Clearly this is why the People's Pooh Bear should take direct control of directing all shipments and mining production operations, as well as dictating prices for coal and wages for miners.

    Or is he already doing that? It seems to change from week to week. Heck of a way to run a railroad.

  30. Commercially viable fusion reactors can't get here fast enough. That's really taking a cheap shot at a whole host of problems, but it's all I have time for right now.

  31. The Dutch are sitting on 5 High Pressure Gas Wells that they have capped because they prefer to buy NATGAS from Russia. The wells already have pipelines running to them because they used to supply a large share of the nation's gas.

    Their choice may be to open the well values or freeze. But, their rulers are willing for their people to freeze in the dark rather than appear anti-green.

    If there are any significant calm periods in Western European weather this winter, it's going to be cold and dark.

  32. "European electricity prices have climbed to their highest levels in over a decade in recent weeks, rising above 100 euros per megawatt-hour in many markets."

    Europe is dealing with the combination of erratic renewables and Russian hardball. This winter could be a disaster if it is a cold winter.

  33. Maybe China shouldn't have cancelled orders for Australian coal out of Covid spite?

    Anyhow if China can't keep the lights of their industry on then you will see an acceleration away from China toward Vietnam, Indonesia, etc where they will keep the lights on.

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