General Electric Co, Bayer AG and other multinational companies operating in Shanghai are being given top priority by city officials when it comes to their power supplies as the peak summer demand period threatens shortages.
"This summer our priority targets for electricity are the foreign-invested enterprises," Shanghai Vice Mayor Zhou Yupeng told a briefing attended by heads of eight multinationals such as General Electric, the world's biggest company by market value, Bayer, Germany's second-biggest drugmaker, and France's Alcatel SA, the world's No. 2 maker of telecommunications equipment.
Shanghai's power demand may rise as much as 15 percent from a year ago during this year's peak period, from tomorrow to Sept. 17, the city government's Web site said. Shanghai had its hottest summer in 60 years in 2003, causing power shortages as air conditioners were turned on in shops, factories and homes.
The city wants to avoid a repeat of last year's blackouts, which affected an industrial park where General Motors Corp makes cars and NEC Corp produces computer chips. At stake is investment by 34,000 foreign companies that reached US$50 billion in the city by last month and accounted for more than 60 percent of its US$48.5 billion of exports last year.
"Power supply to foreign companies, especially those in the preferred industries, will be guaranteed," Yu Beihua, deputy director of Shanghai Development and Reform Committee, said at the meeting last Thursday. He didn't state which are the preferred industries.
The power shortage issue still weighs on the minds of many investors. The China unit of Marubeni Corp, Japan's fifth-largest trading company by revenue, said it suffered losses caused by blackouts last summer that halted production.
"We are very worried about a power shortage as it is very dangerous as a sudden stoppage could cause explosions," said Tadao Manabe, president of Marubeni China. "Last year we had to stop work two to three times a week, with only a few minutes warning each time. Sometimes we didn't even get a warning."
Elmer Stachels, Bayer's chief executive officer for China, said the company is considering building its own generators.
Bayer, which last year generated 1.1 billion euros (US$1.3 billion) in revenue in China, plans to invest US$3.1 billion to build an integrated production site in an industrial park at Caojing, near Shanghai.
"For big projects you need to have your own generators as a safety net," Stachels said.
China faces a power shortage of 60 million megawatt-hours this year, the State Electricity Regulatory Commission said. In the first four months of this year, consumption rose 16.1 percent to 650.5 million megawatt-hours, while production rose 15.8 percent to 647.3 million megawatt-hours, the commission said.
During summer, demand for electricity surges as homes and offices switch on their air conditioners. For every 100 Shanghai households, there are 130 units of air conditioners. Air conditioners used about 6,500 megawatts, of which 2,000 megawatts was by residential consumers.
In April, the city government said it planned to invest more than 100 billion yuan (US$12 billion) by 2010 to double electricity generating capacity. The city plans to buy more than 3,800 megawatts of power from neighboring provinces this year, an increase of more than half from a year earlier.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
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STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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