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China is looking for solutions to its increasingly serious power shortage as demand for electricity is expected to continue to rise this year.

The nation will increase power production, give priority to residential quarters and schools, and do away with preferential policies formulated by localities to boost consumption when supply exceeds demand.

Expansion of some energy-intensive industrial projects will also be restricted.

Chen Jinxing, deputy general manager of the State Grid Corporation, said a growing demand for power and inadequate increases in generating capacity means the gap between supply and demand will become even wider.

"Electricity consumption has been growing by at least 15 per cent on average for the past 17 months since June, 2002. Twenty-one provinces or autonomous regions, or two-thirds of China's total, had to limit the use of electricity due to shortages," said Chen.

The power shortage has affected people's lives and economic growth, said the deputy general manager.

According to the State Grid Corporation, China's electricity consumption will grow to 2,091 billion kilowatt-hours in 2004, up 207 billion kilowatt-hours over 2003. Power shortage will worsen and more areas will encounter blackouts.

The Chinese Government decided on measures to boost power generation and supply at a recent special meeting, Chen noted.

As part of the measures, power companies across the country have been told to operate at full capacity to generate electricity, while new policies will be introduced to encourage consumers to conserve power.

The government has also decided to speed up construction of new power projects.

Chen went on to say the central government will co-ordinate the coal, power and transport sectors in a bid to ensure power supply by stepping up construction of 13 big coal producing bases, increasing coal supplies and improving pricing of coal and electricity.

"Since early this winter, seven provinces have enforced blackouts in selected areas because their power grid fail to cope with all the demand," said Zhao Zunlian, director of the control centre of the State Grid Corporation.

The State Electric Power Regulatory Commission attributed the situation to a number of factors, including:

• Owing to dry spells that plagued China this year, water levels are especially low and hydroelectric plants are unable to operate to their full capacity;
• Many thermal power plants, which constitute the bulk of China's power supply, are operating below their capacity because of inadequate coal supply;
• Use of electricity in heating systems has risen dramatically this winter; and
• Energy-intensive industries, including the production of steel and nonferrous metals have been growing quickly.

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