Denise Tsang – Updated on Mar 03, 2008 – SCMP
Mainland snowstorms have caused the worst power crisis in Guangdong in 30 years, hitting tens of thousands of factories. And the worst is yet to come.
Hong Kong manufacturers across the border are racing to have more expensive and more polluting diesel-fired power generators installed or leased to prepare for consumption peaks in the summer.
They have little hope of seeing the power grids rebuilt anytime soon in Guangdong and nearby provinces of Guangxi, Guizhou, Hunan and Jiangxi, after State Grid Corp, the monopoly power distributor for 26 provinces, revealed a reconstruction cost of 39 billion yuan (HK$42.7 billion) two weeks ago.
Hong Kong Small and Medium Business Association chairman Danny Lau Tat-pong said the supply crunch had prompted power rationing of two to three days a week in the manufacturing hub of Dongguan as a provincial policy stipulated residential needs must be met first.
Reversing its importer role, Guangdong now exports electricity to blizzard-hit provinces in the west.
“Power shortage is one of the many problems we are facing,” he said. “The worst time has yet to come,” he said. Mr Lau, also managing director of metal and glass coating firm Kam Pin Industrial, said that to keep production on schedule, the company’s factory in Da Long, Dongguan, had been forced to use diesel-fired generators.
As a result, the factory’s electricity costs had surged by about 50 per cent, on top of extra costs on diesel.
“The yearly cost of renting a diesel generation unit and buying the fuel is equivalent to the price of three smaller diesel-fired units,” Mr Lau said. “Since we have to keep the furnace burning, we have no choice.”
Mr Lau said the cost per kilowatt hour of diesel-fired electricity stands at 1.8 yuan, compared with 1.2 yuan for electricity sourced from power plants in town.
Bondi Luk, whose factory in Shenzhen produces polystyrene lunch boxes for fast-food chain Maxim’s and public hospitals, said electricity supply was relatively stable in Longgang, despite power rationing once a week.
“Touch wood, we are relatively lucky for now, but the peak demand will arrive in the summer,” Mr Luk said.
Some green groups fear air pollution will worsen with the reintroduction of diesel generators banned a couple of years ago.