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Power shortages unlikely: Official

By Wan Zhihong (china Daily)
Updated: 2008-04-23 08:58

The country will be free from major power shortages this year, but some regions may suffer temporary blackouts in the summer, a senior figure from the national electricity regulator said yesterday.

"We estimate the gap between power supply and demand will be 10 gigawatts (GW). Only high-consuming provinces such as Guangdong will face shortages during the summer peak time," Wang Yeping, vice-chairman of the State Electricity Regulatory Commission (SERC), told reporters in Beijing.

Thanks to the development of the power sector, it is unlikely there will be any nationwide shortages, such as we have had in the past, Wang said.

Last year, both the country's power input and its capacity increased by more than 14 percent from 2006. Government spending in the sector was almost 550 billion yuan ($78.65 billion), according to figures from the SERC.

Of the power generators installed last year, more than 88 percent were thermal, it said.

Last year, authorities closed down 553 small power plants, and coal consumption in the sector fell by 2.5 percent.

Despite significant increases in the price of coal, the government will give "comprehensive and balanced consideration" of the issue before raising power tariffs, Wang said.

"An increase in power prices will have a chain effect across all industries, and the government will take both power generation companies and end users into consideration, especially now, with the consumer price index (CPI) at a high level," he said.

The price of coal for power generation has risen by about 10 percent this year, which will add about 30 billion yuan to the costs of domestic power companies, the SERC said earlier.

The country's five major power generating groups have signed less than 50 percent of the term contracts with coal suppliers they need for this year, Zou Yiqiao at the SERC said earlier.

The price of coal has long been a bone of contention between power generators and coal producers. The country's leading power firms said their 2007 profits were dented by soaring costs.

In 2004, the government introduced a mechanism that tied power tariffs to the price of coal. If the coal price rises by more than 5 percent over a six-month period, power tariffs will also be raised.

Under the mechanism, electricity prices were increased in 2005 and 2006, but analysts have said that due to the high CPI, the government is unlikely to raise tariffs this year.