"The central government will start to enforce penalties against excessive power consuming enterprises from June," Lu Wenbin, deputy director of the Energy Conservation Division of the National Development and Reform Commission (NDRC), was quoted as saying on the commission's website. "Details of the regulation are being completed."
China's National Bureau of Statistics listed six energy-hungry industries on its website, including electricity, iron and steel, nonferrous metals, construction materials, petroleum processing and chemicals.
"China's energy consumption per GDP unit is three or four times the international level, or even eight times that of Japan," said Li Yi, minister of Industry and Information.
In May, China vowed to reduce energy consumption. Premier Wen Jiabao urged "governments at all levels to work with an iron hand" to reach the energy efficiency target.
In 2009, total investment in energy-efficient and emissions reduction projects by Sate-owned enterprises (SOEs) totaled 87.84 billion yuan ($12.9 billion). The SOEs are expected to reduce energy consumption by 20 percent by the end of 2010, according to China's 11th Five-Year Plan (2006-10).
In April, China's power generation increased 331.64 billion kilowatt-hours, an increase of 21.4 percent compared with the same period last year. Meanwhile, the country's energy intensity rose 3.2 percent in the first quarter of this year after a decline of 14.38 percent from 2005 to 2009.
The State Power Corporation (SPC), the nation's largest electricity producer, reported 900 million yuan (131.81 million U. S. dollars) in losses in the first two months of this year. Unlike coal prices, which are now more market oriented, the country's electricity prices are still under control of the government.
In China, the SPC is the dominant producer and supplier of electric power. Electricity prices are subsidized to the point that they fall short of the average total costs of generation and transmission.
The government approved a mechanism linking coal and power prices in 2004. Under the new system, electricity prices ramp up after coal prices rise by more than 5 percent over six months.
