Briefing on Power Shortage and Restriction on Electricity Use Go back »

2021-10-09 | Nanjing

Background:

The National Reform and Development Commission (NRDC) announced that the review result of the energy consumption intensity of the first half year of 2021,in August, and Jiangsu was listed on the alert list due to the poor performance. As NRDC indicated, “For the nine provinces (districts) where the energy consumption intensity does not decrease but increases, the energy-saving review of "double high" projects (高耗能、高排放High energy consumption and high emission) other than major projects planned by the state will be suspended for the rest of 2021, and the local governments will be urged to take effective measures to ensure the completion of the goal.” Later, the NRDC published the Guideline on Double Control over Energy Consumption Intensity and Total Volume. Following the announcement of the alert list and the double control guideline, controlling the energy consumption becomes the priority of Jiangsu government. Jiangsu RDC, Jiangsu Department Industry and Information Technology and other authorities released the relevant notice on containing the development of "two highs" projects, as well as started supervising and monitoring action on regular operation.

Issues:

Based on feedback from members, the impact is province wide with even stricter measures enforced in Wuxi, Xuzhou, Nantong, Lianyungang, Huai’an, Yancheng, Zhenjiang, Taizhou, Suqian as they are on the alert list of Jiangsu. Starting mid-September, to control the energy consumption and meet the goal of 2021, plants are required by local development zone to shut down or reduce production until end of this month or further notice – for example, around 130 factories in Taixing received such notice earlier; in Nanjing chemical park, companies received notice to reduce production by 30%. And it seems that not only the traditional “double high” projects are being targeted, but also the other industries. During and after the national holiday, the restriction is getting stricter, plants in Nanjing received notice about restriction on electricity use, regardless of the industry. It came in such a short notice and only indicated the requirement of one day. No outlook or prediction is available.

Concern:

-            Short notice with no pre-warning makes it extremely difficult for plants to arrange

-            Transparency and the indicator of the restriction are needed.

-            The temporary shut down/ restriction cause damage to equipment along with risk of work safety accidents

-            Big financial loss and discourage investment with potential strategic shift on investing in China

Lobby action:

The European Chamber Nanjing Chapter organized the meeting with the relevant authorities to share the concerns and feedback of the European businesses to the authority.

-   Local:

²  Discuss with relevant department of Jiangsu and Nanjing

²  Meeting with commerce department of Jiangsu on September 22

²  Official Letters to Jiangsu Foreign Affairs Office and Nanjing Foreign Affairs Office to request meetings with the Governor of Jiangsu and Mayor of Nanjing on September 23

-            National:

²  Official letter/ stance sent to NDRC and MoC on Sept. 30

²  MoC Notice of survey to local governments on Oct 3

²  Support embassies and Consulates to send out lobby letters to Jiangsu 

Feedback:

-          As shared by contact of Nanjing relevant authority, In Nanjing, the target is 30% down in September comparing with 2020 while in Oct-Dec, the target is to maintain equal with the absolute number in Sept 2021.

-          The firm controlling measures are enforced from the center government and local government has little saying on this. Though they would like to protect the local corporates, they face the pressure from the top.

-          Relevant government department shared the approach Jiangsu is taking, which is to break down the goal to local municipalities and to different industries, for now, it seems that the one-cut-fits-all approach is the most effective way to meet the central government’s goal and thus avoid the even stricter and firmer controlling measures from the top.

-          The local government will consider granting grace period for plants to adjust the production and order plan. And special industry, such as chemical industry might be given extra consideration for specific measures. And the relevant departments are seeking for further adjustments to the current one-cut-fits-all approach.

Recommendation:

-          Called for pre-notice with certain grace period

-          Transparency and outlook on mid and long-term plan are highly required.

-          Suggested that the one-cut-fits-all approach might increase the regional unit energy consumption and hope the government could set different indicators - enterprises with high energy consumption efficiency are considered to give low indicators while enterprises with low energy consumption efficiency will be given high indicators to encourage enterprises to improve unit energy consumption efficiency and meet the medium - and long-term government low-carbon goals, which will have a positive impact on the market and investment in the medium and long term.

-          European business also would like to understand how long the enforcement will last and what measures are expected next year. 

(Updated on Oct. 8^th by European Chamber Nanjing Chapter)