Southwest China's Sichuan Province has opened its first national level coal reserve base, which can supply 6 million tons a year. This will provide some relief to the province, which has had a shortage of coal, though the overall effect will be limited, industry insiders said.

The Gaoxing coal reserve base, located in Guang'an, received the first truckload on Friday amid a heatwave in the province that has caused an ongoing energy shortage, forcing Sichuan to curb industrial power use for more than one week.

The project can store 600,000 tons of coal in static mode and its servicing capacity can reach 6 million tons a year. 

The project, covering 14.9 hectares of land, is designed to receive coal in slack seasons and supply coal to eight major coal-fired plants located within a radius of 300 kilometers, including those in Chengdu and Chongqing.

An official with the Sichuan provincial state assets watchdog said the province is rich in hydro-power and natural gas, but lacks coal and oil and has a coal supply gap of over 30 million tons, according to news portal thepaper.cn. Together with neighboring Chongqing Municipality, the gap surpasses 80 million tons, the official said, noting that the seasonal shortage is acute and there is an urgent need to tackle the situation.
 
Feng Dongbin, an analyst at China-based Fenwei consultancy, said that when the reserve base becomes fully functional it will provide some support to the province's coal supply but the overall impact will be limited as Sichuan's power is based predominantly on hydropower, which accounts for 78 percent of total installed capacity. Only 19 percent of power generating capacity is from coal.

Operators will also need to factor in the cost factor of transporting coal to Sichuan, as the Southwestern area of the country lacks coal in general, Feng said. 

A Xinhua news agency report quoted a manager with Sichuan Coal Industry Group as saying that the project, upon completion, will act like a "reservoir" and is set to further enhance emergency coal supply to power plants in Sichuan and Chongqing. 

As the heat wave continues, energy companies have been ramping up efforts in power generation.

State-owned energy conglomerate CHN Energy said on Thursday that its subsidiaries utilized multiple channels to transport 190,000 tons of coal into Sichuan and Chongqing from August 1-17, up 89.6 percent from the same period last year. Its coal-fired plants in Sichuan have generated 19 billion kiloWatt hours (kWh) of electricity year-to-date, up 6.4 billion kWh from the corresponding period last year.

Nationwide coal transport to China's coal-fired plants is at record levels, according to a report by the China Electricity Council.