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Worse power gap in summer

Worse power gap in summer

Write: Shakira [2011-05-30]

Worse power gap in summer

China would suffer the worst power shortage this summer.

China's power shortage this summer could be worse than 2004 when the country sweltered through its worst crunch in decades, an industry official said yesterday, as power rationing sets in and calls for reform in the power sector were heard again.

State Grid of China expects the 26 provinces and regions under its management to suffer a combined power shortage of 30 gigawatts in coming months, Xinhua news agency reported, citing Shuai Junqing, the company's executive vice president. State Grid operates grids in all but five southern provinces.

The China Electricity Council last month estimated around 30GW of power shortfall nationwide in the summer, or about 3 percent of the country's generating capacity.

This year's power shortages began in March, well ahead of the peak summer consumption season, after surging coal prices eroded power generators' profitability and also due to insufficient generation capacity and transmission problems.

"All these issues cannot be solved in the short term," Shuai said.

The shortfall has reportedly prompted the government to raise on-grid tariffs - charged by power plants to grid firms - in several provinces last month to encourage production although analysts said the hike was too small to restore profitability of many coal-fired plants, which make up more than 80 percent of China's power generation. China's five major state power generating groups lost more than 10 billion yuan (US$1.54 billion) in their thermal power business in the first four months of this year.

State Grid's Shuai said at least 10 regions, including Beijing and Shanghai, will suffer a power shortage, but the company will first ensure supplies to residents, hospitals and schools.

In 2004, China suffered its worst power deficit since the beginning of the 1990s as it imposed power cuts or limits in 27 of its 31 provinces, municipalities and autonomous regions, Xinhua said.