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Power Crunch Looms Large

Senior experts and advisors hailed the government's moves to rein in runaway investment in sectors that use too much electricity and to expand the power supply.

While they are unlikely to produce tangible results in the near term, the government has taken specific steps to curb excessive investment in sectors that require heavy energy usage.

In discussions at the ongoing session of the National People's Congress (NPC), the moves were acknowledged as a very important step forward, in line with the nation's shifting emphasis to more scientific development.

Putting the brakes on over-investment in power-hungry sectors like aluminum will not only help ease the power crunch but also protect the environment, experts said.

Liang Youzi, an NPC deputy and vice director of Hunan Jinzhushan Power Plant, told China Daily that the rising price of raw materials has put a serious dent in an already meager power supply.

"Our province has had to switch off supplies from time to time to prevent the grid from collapsing," she said.

According to experts, promoting energy conservation is also very important to overcoming future shortages, as it will take years to ease the energy squeeze in China.

K. F. Yan, a Beijing-based senior analyst with Cambridge Energy Research Associates, said readjusting the power consumption structure is key to alleviating the shortage.

China lags far behind Western countries in efficient use of power.

Consumption of one kilowatt/hour of electricity in the United States can produce a profit of US$8 on average, but the figure in China is less than 8 yuan (US$0.96).

"Power-saving standards should be implemented to sustain economic development," Liang said.

For example, China's heating systems are very inefficient, leading to high energy losses, according to Jorgen Clausen, chief executive officer with Danfoss, a leading Danish industrial company.

"Heating reform in China is immediately meaningful and applicable," he said.

Xie Songlin, a member of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), told China Daily: "Power supply shortages cannot be solved quickly, given the current conditions."

More than two-thirds of the nation's territory suffered from power shortages during the past year, mainly a result of insufficient transmission capacity.

The blackouts last summer were partly attributed to bad weather. Unexpected drought greatly crippled generating capacity in some regions.

But it can't all be blamed on the weather.

According to Xie, also a senior adviser to the State Grid Corp., China's power consumption this year is forecast at 2.1 trillion kilowatt hours, an increase of more than 10 percent year-on-year. The power supply, he said, can only grow about 10 percent.

With the exception of Shandong and the northeast provinces, more power outages may take place in the nation this year.

This is especially true for booming east China, which faces a very severe situation, Xie said.

The urgent need to increase energy output has been accentuated by national leaders recently.

Some say that a solution to the chronic power shortage will have to be found quickly to make sure the supply catches up to the world's fastest-growing economy.

China will begin constructing 40 million kilowatts of generating capacity and add another 37 million kilowatts in additional capacity in 2004 to alleviate the power crunch, Ma Kai, director of the National Development and Reform Commission, told the NPC on Saturday.

The country aims to speed up construction of a strategic oil reserve and kick off full commercial production from a mammoth east-west natural gas pipeline.

China also plans to construct a giant hydropower project, which would rival the Three Gorges Project when completed, on the Jinshajiang River. The Jinshajiang is located on the upper reaches of the Yangtze River.

The State Grid Corp. is also quickening the pace of power generator and transmission grid construction. It plans to increase transmission from the Three Gorges power station to Guangdong and Shanghai, and is also working to enhance the integration between the power grids.

But it will take time for all these efforts to pay off.

Xie said coal shortages and poor ability to transport coal create bottlenecks in the country's power supply.

"Solving the energy crunch is a systematic project. The government needs to work out a long-term strategy," he added.

(China Daily March 9, 2004)

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