Investment

Southeastern firms feel pinch of power shutdown

By Zhou Yan (China Daily)
Updated: 2010-09-08 07:29

SHANGHAI - Many manufacturers in southeastern cities have felt the pinch of power shutdowns, an iron-handed measure widely adopted by local governments dashing to meet energy reduction targets outlined in the 11th Five-Year Plan (2006-10) that completes this year.

"We've been informed by the local electric bureau to ration electricity since early August through notices at irregular intervals," said Zhang Feng, general manager of Dongyang Chuangjia Craftsman Manufacturing based in the city of Jinhua, Zhejiang province.

The firm's main machines usually run 24 hours a day using 60 kilowatts of electricity per hour. But electricity rationing has pulled the plug on some machines from time to time, causing a slump in production capacity.

As such, Zhang has become very cautious when taking orders.

"We heard the overuse of the electricity may result in heavy fines For a start-up firm established in 2008, we cannot take the risk," he said.

Instead, he followed thousands of his peers from other manufacturing firms in the region to buy a diesel generator to produce electricity. "For a small company, the generator can partly make up the power gap," Zhang said.

As a matter of fact, Zhang was not alone. Numerous manufacturing houses, particularly in industries with high-carbon emissions, have been heavily hit by the unprecedented power shutdowns in provinces such as Zhejiang and Jiangsu that may fail to meet the emission reduction goals set by the central government if without such tough means.

In Jiangsu province's Yancheng city, Cao Jun, general manager of a steel tube firm felt even more chilly.

His company's products featured with heavy pollution and heavy energy usage are followed into the category that faces tougher tasks to conserve energy.

"Our factory's power supply is shut down one or two days a week since August, which caused a 20 percent to 30 percent cut in production capacity," Cao said. "Our manufacturing equipment requires very high power generators that are hard to purchase in the market," he said.

Premier Wen Jiabao in May urged cuts to carbon emissions and energy conservation to fulfill the target outlined in the 11th Five-Year Plan to cut per unit GDP energy consumption by 20 percent by year's end from 2005 levels.

China Daily