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NDRC: Accelerate the Release of High-Quality Coal Production Capacity
Release date:
2018-06-26
Source:
Recently, the National Development and Reform Commission issued the "Notice on Ensuring Coal, Electricity, Oil, and Gas Supply during Peak Demand Periods in Summer 2018," highlighting that this year’s summer supply situation for coal, electricity, oil, and gas will be challenging. Regional and time-specific imbalances between supply and demand are expected to persist throughout the peak summer period. The notice calls for accelerating the release of high-quality coal production capacity, ensuring stable power generation and supply, and pragmatically advancing coal-power joint operations.
Recently, the National Development and Reform Commission issued the "Notice on Ensuring Coal, Electricity, Oil, and Gas Supply during Peak Demand Periods in Summer 2018," highlighting that this year’s summer supply situation for coal, electricity, oil, and gas will be challenging. Regional and time-specific imbalances between supply and demand are expected to persist throughout the peak summer period. The notice calls for accelerating the release of high-quality coal production capacity, ensuring stable power generation and supply, and pragmatically advancing coal-power joint operations.
The notice highlights that, during this year's peak-demand period for summer, the supply and demand of coal, electricity, oil, and gas have remained generally stable. However, as China’s economy and society enter a stage of high-quality development, people’s growing aspirations for a better quality of life continue to rise—placing even greater demands on ensuring the reliable supply of coal, electricity, oil, and gas. As a result, region-specific and time-sensitive imbalances between supply and demand are still likely to occur. In terms of coal, electricity demand has surged significantly during the summer peak season, potentially leading to tight supply conditions in certain regions and at specific times. For electricity, the nation’s overall power consumption has maintained a robust growth rate this year. During the summer peak period, some areas in North China, East China, and Central China experienced tight supply-demand dynamics during peak hours, with some regions even facing potential power supply gaps. Regarding natural gas, sustained high industrial and power-generation demand has kept the market from cooling down despite the off-season. Even during the summer peak, while efforts are being made to boost gas storage levels in preparation for winter supply needs, local areas may still struggle to fully meet the rapid increase in demand.
The notice emphasizes the following key priorities: First, accelerate the release of high-quality coal production capacity. Thoroughly implement the requirements for capacity reduction linked to replacement, expedite the construction progress and regulatory approvals for premium-capacity coal mines, and systematically carry out technological upgrades and restructuring initiatives aimed at reducing output. Ensure that newly built coal mines are brought online and reach full production levels in strict compliance with laws and regulations as soon as possible. Encourage production mines with favorable geological conditions, robust safety records, and advanced mechanization to undergo capacity-replacement assessments, thereby continuously boosting effective supply and maximizing the availability of medium- to long-term power coal contracts. Additionally, conduct a classified approach to managing suspended or idle coal mines: rigorously follow established procedures to resume operations at those that meet the necessary criteria, while expediting the restructuring, consolidation, and market exit of "zombie enterprises"—long-term shutdowns with no prospects for revival or reconstruction. Second, ensure stable power generation and supply. Secure more medium- to long-term contracts for coal supplies and ensure their diligent execution. Strengthen equipment maintenance, operation, and management practices to maintain reliable and consistent power generation. Third, intensify efforts to optimize the transportation and distribution of refined oil products. Fourth, advance the development of natural gas storage facilities and related infrastructure. Fifth, coordinate and guarantee the smooth transportation of critical materials. Specifically, strive to increase rail freight capacity directed toward major coal transshipment hubs such as Qinhuangdao, ensuring that port inventories remain at healthy, elevated levels. Finally, prioritize the security of energy supplies. Simultaneously, bolster peak-shaving capabilities to foster a dynamic balance between supply and demand, enhance natural gas storage and peak-shaving infrastructure, promote efficient and rational gas consumption, strengthen electricity system flexibility, and enforce comprehensive coal inventory management protocols to safeguard the stability of power coal supplies.
The notice emphasizes the need to pragmatically advance coal-power joint operations. All regions and enterprises must fully recognize the critical role of coal-power integration in addressing the persistent "coal-power conflict" issue, and actively push forward this initiative at every level. This should be done in tandem with state-owned enterprise reforms and the development of a mixed-ownership model, as well as aligned with efforts to reduce coal overcapacity and promote industry consolidation and restructuring. Specifically, coal companies are encouraged to establish power plants, while power generation firms are encouraged to invest in coal mines. Additionally, coal and power companies can explore various forms of collaboration, such as mutual equity participation and share swaps, to foster deeper coal-power integration. Meanwhile, relevant regions and departments are urged to effectively implement supportive policies for coal-power joint-operation projects, ensuring priority access to planning approvals, early release of high-quality production capacity, optimized transportation arrangements, timely debt resolution, enhanced financing support, and inclusion in pilot programs for targeted policy assistance.
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