BEIJING • A frigid winter is leading to power shortages in parts of China, driving up demand for diesel, as factories rush to install generators to keep the lights on.
Some provinces have started rationing electricity to industrial and commercial users to ensure there is enough power to heat homes during a colder-than-normal winter.
That is prompting factories to snap up portable generators and the diesel they run on to ensure plants stay open to meet orders amid record-high exports.
The Chinese meteorological authority earlier issued an orange alert nationwide - the second-highest level in its four-tier system - as a cold wave sweeps through the nation. With temperatures still expected to dip further, grid operators are prioritising the supply of energy to homes and the community, leaving other clients to scramble for alternative power sources.
"Power cuts have brought us extra orders," Ms Huang Yu, a sales manager at Shandong Dianyuan Village Power Technology, which supplies generators. "We have been quite busy since November, receiving non-stop orders from customers in Jiangsu and Zhejiang."
The firm, which has a wide range of generators including some large enough to power a small town, has sold more than 20 a day recently, more than triple the normal level, Ms Huang said. Its social media account posted a video on Dec 17 showing trucks loading dozens of power generators for shipment to regions suffering power cuts.
Wholesale diesel prices in China rose to the highest level since April, based on data from the National Bureau of Statistics.
Inventories of the fuel across the country fell 5.26 per cent, in the month to Dec 25, to 20.76 million tonnes, according to information provider OilChem.
"Even 0.5 per cent of China's electricity switching to power by diesel would make a large impact on diesel demand," said analyst Tee Seng-Yick from Beijing-based SIA Energy.
China's power demand surged in the second half of last year as its economy recovered from the Covid-19 pandemic and global demand for protective gear and medical equipment it produces soared.
A colder-than-normal winter caused by a La Nina weather pattern added to that, boosting consumption by 11 per cent last month, more than double the growth of a year ago, said the National Development and Reform Commission.
Coal supplies have also been tight amid import restrictions and safety checks at domestic mines, and natural gas has been rationed to ensure supplies for heating. Diesel generators are often used as backups because the fuel is easy to find and relatively cheap.