Introduction: Recently, the “red light” has been turned on in the dual control of energy consumption in many places in China. In less than four months from the year-end “big test”, the areas named by the Ministry of Industry and Information Technology have taken measures one after another to try to improve the energy consumption problem as soon as possible. Jiangsu, Guangdong, Zhejiang and other major chemical provinces have made heavy blows, taking measures such as stopping production and power outages for thousands of enterprises.Let local enterprises feel caught off guard. Why is power cut and production stopped? What impact will it bring to the industry?
Multi-province power cuts and limited production.
Recently, Yunnan, Jiangsu, Qinghai, Ningxia, Guangxi, Guangdong, Sichuan, Henan, Chongqing, Inner Mongolia, Henan and other places began to take measures to limit and control the energy consumption for the purpose of double control of energy consumption. Electricity restriction and production restriction have gradually spread from the central and western regions to the eastern Yangtze River Delta and Pearl River Delta.
Sichuan: Suspend unnecessary production, lighting and office loads.
Henan: Some processing enterprises have limited power for more than three weeks.
Chongqing: Some factories cut power and stopped production in early August.
Inner Mongolia: Strictly control the power cut time of enterprises, and the price of electricity will not rise by more than 10%. Qinghai: Early warning of power cut was issued, and the scope of power cut continued to expand. Ningxia: High-energy-consuming enterprises will stop production for one month. Power cut in Shaanxi until the end of the year: The Development and Reform Commission of Yulin City, Shaanxi Province issued the target of double control of energy consumption, requiring that the newly built “two high” projects should not be put into production from September to December.This year, the newly-built and put into operation “Two High Projects” will limit production by 60% on the basis of last month’s output, and other “Two High Projects” will implement measures such as reducing the operation load of production lines and stopping submerged arc furnaces to limit production, so as to ensure a 50% reduction in production in September. Yunnan: Two rounds of power cuts have been carried out and will continue to increase in the follow-up. The average monthly output of industrial silicon enterprises from September to December is not higher than 10% of the output in August (that is, the output is cut by 90%);From September to December, the average monthly output of yellow phosphorus production line shall not exceed 10% of the output in August 2021 (i.e., the output shall be reduced by 90%). Guangxi: Guangxi has introduced a new double control measure, requiring that high energy-consuming enterprises such as electrolytic aluminum, alumina, steel and cement should be limited in production from September, and a clear standard for reducing production is given. Shandong has double control of energy consumption, with daily power shortage of 9 hours;According to the early warning announcement of Rizhao Power Supply Company, the coal supply in Shandong Province is insufficient, and there is a power shortage of 100,000-200,000 kilowatts every day in Rizhao. The main occurrence time is from 15: 00 to 24: 00, and the shortcomings last until September, and the power restriction measures are started. Jiangsu: At the meeting of Jiangsu Provincial Department of Industry and Information Technology in early September, it was instructed to carry out special energy-saving supervision for enterprises with annual comprehensive energy consumption above 50,000 tons of standard coal.The special energy-saving supervision actions covering 323 enterprises with annual comprehensive energy consumption of more than 50,000 tons and 29 enterprises with “two high” projects were fully launched. The printing and dyeing gathering area issued a notice of suspension of production, and more than 1,000 enterprises “started two and stopped two”.
Zhejiang: The key energy-using enterprises in the jurisdiction will use electricity to reduce the load, and the key energy-using enterprises will stop production, which is expected to stop until September 30th.
Anhui saves 2.5 million kilowatts of electricity, and the whole province uses electricity in an orderly manner: The Office of the Leading Group for Energy Guarantee and Supply in Anhui Province reported that there will be a power supply and demand gap in the whole province. On September 22nd, it is estimated that the maximum power load in the whole province will be 36 million kilowatts, and there is a gap of about 2.5 million kilowatts in the balance between power supply and demand, so the supply and demand situation is very tense. It was decided to start the province’s orderly electricity utilization plan from September 22nd.
Guangdong: Guangdong Power Grid said that it will implement the “two starts and five stops” power consumption scheme from September 16th, and realize the off-peak shift every Sunday, Monday, Tuesday, Wednesday and Thursday. On off-peak days, only the security load will be reserved, and the security load is below 15% of the total load!
Many companies announced that they would stop production and cut production.
Affected by the dual control policy, various enterprises have issued announcements to stop production and reduce production.
On September 24th, Limin Company announced that Limin Chemical, a wholly-owned subsidiary, had temporarily stopped production to meet the requirements of “double control of energy consumption” in the region. On the afternoon of September 23rd, Jinji announced that recently, the Administrative Committee of Taixing Economic Development Zone of Jiangsu Province accepted the requirement of “double control of energy consumption” from higher-level government departments, and suggested that relevant enterprises in the park should implement measures such as “temporary production suspension” and “temporary production restriction”.With the active cooperation of the company, Jinyun Dyestuff and Jinhui Chemical, wholly-owned subsidiaries located in the park, have been temporarily limited in production since September 22nd. In the evening, Nanjing Chemical Fiber announced that due to the shortage of power supply in Jiangsu Province, Jiangsu Jinling Cellulose Fiber Co., Ltd., a wholly-owned subsidiary, had temporarily stopped production since September 22nd and was expected to resume production in early October. On September 22nd, Yingfeng announced that,In order to alleviate the coal inventory situation and ensure the safe and orderly production of heat supply and consumption enterprises, the company temporarily stopped production on September 22-23. In addition, 10 listed companies, including Chenhua, Hongbaoli, Xidamen, Tianyuan and *ST Chengxing, announced the related issues of their subsidiaries’ production suspension and limited production due to “double control of energy consumption”.
Reasons for power failure, limited production and shutdown.
1. Lack of coal and electricity.
In essence, the power cut-off is a lack of coal and electricity. Compared with 2019, the national coal output has hardly increased, while the power generation is on the rise. The inventory of Beigang and the coal inventory of various power plants are obviously reduced by naked eyes. The reasons for coal shortage are as follows:
(1) In the early stage of coal supply side reform, a number of small coal mines and open-pit coal mines with safety problems were closed, but no large coal mines were used. Under the background of good coal demand this year, coal supply was tight;
(2) This year’s export situation is very good, the electricity consumption of light industrial enterprises and low-end manufacturing industries has increased, and the power plant is a big coal consumer, and the coal price is too high, which has increased the production cost of the power plant, and the power plant has insufficient power to increase production;
(3) This year, the coal import was changed from Australia to other countries, and the import coal price increased greatly, and the world coal price also remained high.
2. Why not expand the supply of coal, but cut off electricity?
In fact, the total power generation in 2021 is not low. In the first half of the year, China’s total power generation was 3,871.7 billion kWh, twice that of the United States. At the same time, China’s foreign trade has grown very fast this year.
According to the data recently released by the General Administration of Customs, in August, the total value of China’s foreign trade import and export was 3.43 trillion yuan, an increase of 18.9% year-on-year, achieving a positive year-on-year growth for 15 consecutive months, further showing a steady and stable trend. In the first eight months, the total value of China’s foreign trade import and export was 24.78 trillion yuan, up 23.7% year-on-year and 22.8% over the same period in 2019.
This is because foreign countries are affected by the epidemic, and there is no way to produce normally, so our country’s production task is aggravated. It can be said that in 2020 and even in the first half of 2021, our country almost ensured the global commodity supply by itself, so our foreign trade was not affected by the epidemic, but much better than the import and export data in 2019. As exports increase, so do the raw materials needed.The import demand of bulk commodities has soared, and the sharp price increase of steel since the end of 2020 is caused by the price increase of iron ore and iron concentrate Dafu. The main means of production in the manufacturing industry are raw materials and electricity. With the aggravation of production tasks, China’s electricity demand continues to increase. Why don’t we expand the supply of coal, but we should cut off electricity? On the one hand, there is a great demand for power generation.However, the cost of power generation has also increased. Since the beginning of this year, the domestic coal supply and demand have been tight, the price of thermal coal is not weak in the off-season, and the coal price has risen sharply and kept running at a high level. Coal prices are high and difficult to fall, and the production and sales costs of coal-fired power enterprises are seriously upside down, which highlights the operating pressure. According to the data of China Electricity Council, the unit price of standard coal in large power generation group increased by 50.5% year-on-year, while the electricity price remained basically unchanged.The loss of coal-fired power enterprises has obviously expanded, and the whole coal-fired power sector has lost money. It is estimated that the power plant will lose more than 0.1 yuan every time it generates one kilowatt-hour, and will lose 10 million when it generates 100 million kilowatt-hours. For those large power generation enterprises, the monthly loss exceeds 100 million yuan. On the one hand, the coal price is high, and on the other hand, the floating price of electricity price is controlled, so it is difficult for power plants to balance their costs by increasing the on-grid electricity price.Therefore, some power plants would rather generate less or even no electricity. In addition, the high demand brought by the incremental orders of overseas epidemics is unsustainable. The increased production capacity due to the settlement of incremental orders in China will become the last straw to crush a large number of SMEs in the future. Only the production capacity is limited from the source, so that some downstream enterprises cannot expand blindly.Only when the order crisis comes in the future can it be truly protected downstream. On the other hand, it is urgent to realize the requirement of industrial transformation. In order to eliminate backward production capacity and carry out supply-side reform in China, there is not only the need for environmental protection in order to achieve the goal of double carbon, but also an important purpose-realizing industrial transformation.From traditional energy production to emerging energy-saving production. In recent years, China has been moving towards this goal, but since last year, due to the epidemic situation, the production task of China’s high-energy products has been aggravated under high demand. With the epidemic raging, the global manufacturing industry stagnated, and a large number of manufacturing orders returned to the mainland.However, the problem in the current manufacturing industry is that the pricing power of raw materials is controlled by international capital, which has soared all the way, while the pricing power of finished products has fallen into the internal friction of capacity expansion, competing to bargain. At this moment, the only way is to limit production, and through supply-side reform, to enhance the status and bargaining power of China’s manufacturing industry in the global industrial chain. In addition,Our country will need high-efficiency production capacity for a long time in the future, and the increase of the added value of products of enterprises is the leading trend in the future. At present, many domestic enterprises in traditional fields rely on each other to lower prices for survival, which is unfavorable to the overall competitiveness of our country. New projects are replaced by backward production capacity according to a certain proportion, and from the technical point of view,To reduce the energy consumption and carbon emissions of traditional industries significantly, we must rely on large-scale technological innovation and device transformation. In the short term, in order to complete the target set by China’s industrial transformation, China cannot simply expand the coal supply, and power cut and limited production are the main ways to achieve the double control index of energy consumption in traditional industries. In addition, the prevention of inflation risks cannot be ignored. America overprinted a lot of dollars,These dollars will not disappear, they have come to China. China’s manufactured goods, sold to the United States, in exchange for dollars. But these dollars can’t be spent in China. They have to be exchanged for RMB. How many dollars Chinese enterprises earn from the United States, the People’s Bank of China will exchange the equivalent RMB. As a result, there are more and more RMB. Flooding in the United States,Are poured into China’s circulation market. In addition, international capital is crazy about commodities, and copper, iron, grain, oil, beans, etc. are easy to drive up prices, thus triggering potential inflation risks. Overheated money on the supply side can stimulate production, but overheated money on the consumer side can easily lead to price increases and inflation. Therefore, controlling energy consumption is not only the requirement of carbon neutralization,Behind it is the country’s good intentions! 3. Assessment of “Double Control of Energy Consumption”
Since the beginning of this year, in order to achieve the goal of double carbon, the assessment of “double control of energy consumption” and “two high control” has been strict, and the assessment results will serve as the basis for the work assessment of the local leadership team.
The so-called “dual control of energy consumption” policy refers to the related policy of dual control of energy consumption intensity and total amount. The “two high” projects are projects with high energy consumption and high emission. According to the ecological environment, the scope of the “Two Highs” project is coal, petrochemical, chemical, iron and steel, nonferrous metal smelting, building materials and other six industry categories.
On August 12, the Barometer for the Completion of Double Control Targets of Regional Energy Consumption in the First Half of 2021 issued by the National Development and Reform Commission showed that the energy consumption intensity of nine provinces (regions) in Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi and Jiangsu did not decrease but rose in the first half of 2021, which was listed as a red first-class warning. In the aspect of total energy consumption control,Eight provinces (regions) including Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Yunnan, Jiangsu and Hubei were listed as the red level warning. (Related links:9 provinces were named! National Development and Reform Commission: Suspend the examination and approval of “two high” projects in cities and prefectures where the energy consumption intensity does not decrease but rises.）
In some areas, there are still some problems such as blind expansion of the “Two Highs” projects and rising energy consumption instead of falling. In the first three quarters, excessive use of energy consumption indicators. For example, due to the epidemic situation in 2020, local governments were in a hurry and won many projects with high energy consumption, such as chemical fiber and data center. By the second half of this year, many projects had been put into operation, resulting in an increase in total energy consumption.Nine provinces and cities actually have double control indicators, almost all of which are hung with red lights. In the fourth quarter, in less than four months from the year-end “big test”, the regions named by the Ministry of Industry and Information Technology have taken measures one after another to try to improve the energy consumption problem as soon as possible and avoid exceeding the energy consumption quota. Jiangsu, Guangdong, Zhejiang and other major chemical provinces have made heavy blows.Thousands of enterprises have taken measures to stop production and cut off power, which has caught local enterprises by surprise.
Impact on traditional industries.
At present, limiting production has become the most direct and effective way to control energy consumption in various places. However, for many industries, the changes in the economic situation this year, the repeated overseas epidemics and the complicated trend of bulk commodities have made various industries face various difficulties, and the limited production brought about by the dual control of energy consumption has once again caused shocks. For the petrochemical industry,Although there have been power cuts in peak power consumption in previous years, the situations of “opening two and stopping five”, “limiting production by 90%” and “stopping production by thousands of enterprises” are all unprecedented. If the electricity is used for a long period of time, the production capacity will definitely not keep up with the demand, and orders will only be further reduced, making the supply on the demand side more tight. For the chemical industry with high energy consumption,At present, the traditional peak season of “Golden September and Silver 10″ is already in short supply, and the double control of superimposed energy consumption will lead to a reduction in the supply of high-energy chemicals, and the prices of raw materials coal and natural gas will continue to rise. It is expected that the overall chemical prices will continue to rise and hit a high point in the fourth quarter, and enterprises will also face the double pressure of price increase and shortage, and the grim situation will continue!
State control.
1. Is there a “deviation” phenomenon in large-scale power cut and production reduction?
The impact of power cuts on the industrial chain will undoubtedly continue to be transmitted to more links and regions, and will also force enterprises to further improve efficiency and reduce emissions, which is conducive to promoting the development of China’s green economy. However, in the process of power cuts and production cuts, is there a phenomenon of one-size-fits-all and work deviation? Some time ago, workers in Erdos No.1 Chemical Plant in Inner Mongolia Autonomous Region sought help on the Internet:Recently, Ordos Electric Power Bureau often has power outages, even many times a day. At most, it has power outages nine times a day. Power failure causes the calcium carbide furnace to stop, which will lead to frequent start and stop of lime kiln due to insufficient gas supply, and increase the potential safety hazards in ignition operation. Due to repeated power outages, sometimes the calcium carbide furnace can only be manually operated. There was a calcium carbide furnace with unstable temperature.When calcium carbide splashed out, the robot was burnt down. If it was man-made, the consequences would be unimaginable. For the chemical industry, if there is a sudden power outage and shutdown, there is a great safety risk in low-load operation. A person in charge of Inner Mongolia Chlor-Alkali Association said: It is difficult to stop the calcium carbide furnace and resume production after repeated power outages, and it is easy to form potential safety hazards. In addition,The PVC production process matched with calcium carbide enterprises belongs to Class I load, and repeated power outages may induce chlorine leakage accidents, but the whole production system and personal safety accidents that may be caused by chlorine leakage accidents cannot be evaluated. As the workers in the above-mentioned chemical plants said, frequent power outages “can’t be done without work, and safety is not guaranteed”.Facing the inevitable new round of raw material shocks, power consumption gap and possible “deviation” phenomenon, the state has also taken some measures to ensure supply and stabilize prices. 2. The National Development and Reform Commission and the National Energy Administration jointly carried out the supervision of energy supply and price stability, focusing on on-site supervision, focusing on the implementation of policies for increasing coal production and supply in relevant provinces, autonomous regions and enterprises.Nuclear increase and release of advanced production capacity, handling of relevant project construction and commissioning procedures, implementation of full coverage of medium-and long-term contracts for coal for power generation and heating, performance of medium-and long-term contracts, implementation of price policies in coal production, transportation, trading and sales, and implementation of market-based price mechanism of “benchmark price+fluctuation” for coal-fired power generation.In view of the difficulties and problems encountered by enterprises in releasing advanced production capacity, the supervision work will go deep into enterprises and relevant departments, promote the implementation of the requirements of the “streamline administration, delegate power, strengthen regulation and improve services”, help enterprises to coordinate and solve outstanding problems affecting the release of production capacity, and strive to increase coal supply and ensure the people’s demand for coal for production and living by taking measures such as handling relevant formalities in parallel. 3 National Development and Reform Commission:100% of heating coal in Northeast China will be subject to medium-and long-term contract price Recently, the National Development and Reform Commission will organize relevant provincial economic operation departments, major coal production enterprises in Northeast China, coal mines with guaranteed supply and key power generation and heating enterprises in Northeast China, and concentrate on making up the medium-and long-term contracts of coal in heating season, so as to increase the proportion of coal occupied by medium-and long-term contracts of power generation and heating enterprises to 100%.In addition, in order to effectively ensure the implementation of a series of measures introduced by the state to ensure energy supply and price stability and achieve results, recently, the National Development and Reform Commission and the National Energy Administration jointly dispatched a supervision team, focusing on supervising the implementation of the policy of increasing coal production and supply, nuclear increase and release of advanced production capacity, and handling of project construction and commissioning procedures.As well as the implementation of price policies in coal production, transportation, trading and sales, so as to increase coal supply and ensure the people’s demand for coal for production and living. 4. National Development and Reform Commission: Keeping the 7-day coal deposit safety bottom line. I learned from the National Development and Reform Commission that in order to ensure the coal supply and price stability and ensure the safe and stable supply of coal and coal power,Relevant departments require to improve the safety coal storage system of coal-fired power plants, reduce the coal storage standard of power plants in peak season, and keep the safety bottom line of coal storage for 7 days. At present, the National Development and Reform Commission and the National Energy Administration have set up a special class for the protection and supply of electric coal, which will include the power plants that implement the differential coal storage system in the off-peak season into the key protection scope, so as to ensure that the bottom line of 7-day safe coal storage of power plants is firmly held.When the available days of thermal coal inventory are less than 7 days during the operation of the power plant, the key supply guarantee mechanism will be started immediately, and relevant departments and key enterprises will give key coordination and guarantee in coal source and transportation capacity.
Conclusion:
This manufacturing “earthquake” is hard to avoid. However, as the bubble passes, the upstream will gradually cool down, and the prices of bulk commodities will also decrease. It is inevitable that the export data will drop (it is extremely dangerous if the export data soar wildly). Only China, the country with the best economic recovery, can make a good trade-off. Haste makes waste,This is the subtext of the country’s manufacturing industry. Controlling energy consumption is not only the requirement of carbon neutrality, but also the good intention of the country to protect the manufacturing industry.