Nation to ramp up coal imports amid power shortages

China is likely to ramp up coal imports to ensure sufficient power supplies in the country, as recent deficits sparked by the lack of coal have led to concerns about energy supplies for the upcoming heating season, analysts said.

"China is likely to import more coal from neighboring countries, including Russia and Mongolia, as it strives to ensure supplies to keep lights on at home," said Wei Hanyang, a power market analyst at BloombergNEF.

"China typically relies on imports for about 10 percent of its demand, and the country's reliance on imports from Indonesia has already increased as Beijing imposed restrictions on imports from Australia since the second half of 2020," he said.

"However, in recent months, Indonesia has restricted thermal coal exports, as its domestic thermal coal production has suffered due to COVID-19 as well as weather events, which put China in another dilemma and increased the necessity to seek other coal sources, especially in the face of winter heating demands."

The government plans to increase coal imports moderately while taking measures to ensure adequate energy supplies during the upcoming heating season when demand is expected to surge, the National Development and Reform Commission said.

The NDRC made the latest announcement to "increase coal imports in an orderly manner" as a supplementary measure in addition to ramping up domestic production.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University in Fujian province, said the government has been taking measures to boost power supplies, while grid companies are also stepping up efforts to optimize both power dispatching and transmission systems to guarantee efficient power supply.

Jilin province also called for an increase in coal imports. Han Jun, governor of Jilin province, said during an inspection of coal and power companies that it is necessary for the province to push forward the purchase of coal from abroad, including Russia, Indonesia and Mongolia, to ensure sufficient coal and power supplies in the region.

"Multiple channels" are needed to be set up to guarantee coal supplies, Han said, adding that the province will also urgently send teams to secure supply contracts in Inner Mongolia.

Electric companies across China have launched a series of measures to guarantee electricity in response to concerns about outages and blackouts that occurred in Northeast China last month.