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China prepares for summer power crisis
by Staff Writers
Beijing (UPI) Jun 20, 2011

China's top five power companies reported increased losses as they cope with rising coal costs and a cap on electricity prices, the China Electricity Council said, warning that the losses would make it more difficult to ensure adequate supplies of power during the summer.

The announcement comes as China faces a looming power crisis this summer, which State Grid Corp. of China, the country's leading power distributor, said could be worse than 2004, when China suffered the worst power shortage since the beginning of the 1990s.

The 26 provinces under its service could face combined power shortages of 30 million kilowatts this summer.

China, the world's biggest consumer of energy, relies on coal for more than 70 percent of its energy needs.

The five power companies, including China Huaneng Group, China Datang Corp., China Huadian Group, China Guodian Corp. and China Power Investment Corp. provide about half of the country's power.

For the first five months of this year, combined losses for the companies totaled $1.87 billion, nearly triple from last year, state-run news agency Xinhua reports.

In a move to encourage coal power plants to generate more electricity for the summer, last month China's top economic planner and price regulator, the National Development and Reform Commission, increased prices by about $2.57 per 1,000 kilowatt hours for industrial, commercial and agricultural electricity across the country's 15 provinces. Prices for residential electricity weren't changed.

Yet shortly after the hike, the NDRC vowed to punish thermal coal producers for price hikes amid the current electricity shortage.

In Shanghai, the gap between supply and demand this summer could reach 2.1 million kilowatts, says the Shanghai Municipal Electric Power Co., China Daily newspaper reports.

Up to 24,000 of its customers, mostly industrial users, would face power rationing this summer, the highest number since 2003.

The power company urged the city's shopping malls and office buildings to close on excessively hot days this summer to conserve power for residential use.

It also asked non-industrial users to keep air temperatures to 78.8 degrees Fahrenheit. Office buildings with power loads exceeding 100 kilowatts, the power company said, could be asked to switch off air conditioners for an hour when the temperature exceeds 95 degrees Fahrenheit.

"We hope that non-industrial users will understand this plan and cooperate and we will guarantee the supply of power to residents," said Gu Weicheng, spokesman for the Shanghai Municipal Electric Power Co.

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