China may see worst energy crisis in years

0 CommentsPrint E-mail, May 17, 2011
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China is likely to suffer the worst energy crisis in years as power shortages have gripped many parts of the country in recent months. There are also growing concerns that the country's economic growth may suffer.

Since March this year, business sector in costal China and some inland provinces have repeatedly seen power cuts and blackouts due to price controls, rising demands, hydropower production decline and a lingering drought in China's south, China Daily reported.

East China Grid Co Ltd, a regional power distributor, estimated that Jiangsu, Zhejiang, Fujian, Anhui and Shanghai in coastal China may suffer combined power shortages of up to 19 million kilowatts (kW) in the summer.

Power supply systems in the central Chinese provinces of Hunan, Hubei, Henan, Jiangxi and Shanxi are also facing significant pressure, the State Grid said.

Another cause of this year's severe power shortage is China's push to transform its economic development pattern by encouraging investment in emerging industries, such as new energy, Xinhua News Agency said.

The push has raised the entry threshold for energy-intensive sectors, triggering an output slump in some traditional industries, including electricity, cement and machinery, and prompting a spike in demand.

Thermal power previously accounted for 75 percent of China's total installed power capacity and 82 percent of the country's generating capacity, but investment in the sector dropped to 130 billion yuan ($20 billion) last year from 200 billion yuan five years ago. The nation's newly-added thermal power capacity in the first quarter of this year was 2.68 million KW less than the same period last year.

Meanwhile, in spite of huge investments in wind power, solar power and other new energies, new energy industries have made limited contributions to the growth of the country's installed power capacity.

China Electricity Council (CEC), a power industry association, predicts that China will have a 30 million KW power shortfall this summer.

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