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Shanghai: Price Shift to Spread Power Use

Shanghai is looking at ways to encourage energy-intensive businesses to schedule work away from peak hours this summer as the city continues to battle with power shortages.

The government will probably enlarge the price gap between power supply in the daytime and at night, the Shanghai Price Bureau revealed Tuesday.

The adjustment will make electricity more expensive in the daytime, and cheaper at night, to encourage businesses to voluntarily shift production to non-peak hours, the bureau said.

Officials wouldn't say, however, how much they would raise prices during the day or when the change would take effect.

The city faces a shortage of up to 4 million kilowatts of power this summer when demand is expected to surge as residents turn on their air conditioners to beat the heat.

Any price adjustment will only affect industrial users, not residents, according to a report in the Youth Daily.

Currently, industrial users pay four times as much for power during the day as they do during non-peak hours. The central government has said power should cost five times more during peak hours than at night.

Residential users pay about twice as much for power during the day as they do after 10pm.

"We are waiting to see the government's detailed measures so we can plan our working schedule for the summer," said Sun Deyi, a spokesman for Shanghai Electric (Group) Corp, China's largest producer of machinery equipment.

"We will be very cooperative with the government in dealing with the electricity supply issue," Sun added.

Shanghai electric was one of many companies around the city that had to shift production schedules last summer, when power shortages caused much concern and a few brownouts.
also said yesterday the city will cut its coal consumption for industrial use to 38 million tons by 2007, as officials push for more residents and businesses to use clean energy.

The city will also push for more people to use natural gas, recycled energy and new forms of power, such as solar energy and wind.

"On the way to building a metropolis, the city is set to develop its industry, whose sustainable development depends on the environment and natural resources," Le Jingpeng, deputy director of the Shanghai Economic Commission, said Tuesday.

"Coal will be the city's main energy source for a long time," said Jiang Yingshi, director of the Shanghai Development and Reform Commission. "However, the total consumption of coal must be checked."

Coal consumption accounted for 60 percent of all energy used in the city last year, down from 72 percent in 1996.

Natural gas is expected to account for over 10 percent of the city's energy consumption by 2010. Currently, it only accounts for 2 percent, said Jiang.

(Eastday.com March 31, 2004)

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