From: Elaine Kurtenbach, Associated Press
Published November 15, 2004 12:00 AM

China to See More Energy Shortages, Report Says

SHANGHAI, China - Shortages of coal and electricity are expected this winter in China, state media reported Monday.


The National Power Regulatory Commission reported high demand for virtually every region in the country, the state-run newspaper China Daily said, citing a government television report.


"The East China power grid will be confronted with the most severe shortage of power supply," the report said.


China has been stepping up construction of power plants, including nuclear energy facilities, as it races to bridge the gap between supply and demand. Officials say the shortages are expected to last only for another year or two.


The China Daily report said authorities would take "some positive measures to cope and will not massively raise electricity prices for households." It gave no details.


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China has already raised electricity rates twice this year to help combat the shortages. The hikes have mainly affected industrial users.


Chinese cities have been experiencing periodic brownouts for more than a year, as supplies of coal and electricity fail to keep up with surging demand from both booming industries and households -- now equipped with more air conditioners and other appliances than ever before.


The report said China generated a total 1.74 trillion kilowatts of power in the first 10 months of this year, up 15 percent from the same period of 2003.


The shortfall during the peak of summer heat waves was about 30 million kilowatts, it said. The report gave no figure for the forecast winter power shortfall.


In a separate report, the newspaper said coal reserves for winter residential heating in many northern cities were far below the required amount.


China produced 1.3 billion tons of coal in the first 10 months of the year, a year-on-year increase of 16 percent, but rail capacity meets only one-third of demand.


The report noted that many heating supply systems were facing mounting debts.


State employers used to supply winter heating to company-issued housing for free. But now most housing has been privatized and heating suppliers operate as utilities that must bill customers, many of whom do not pay.


Since heating systems are centralized, often using pipes to circulate hot water through entire city districts, individual apartments can't be cut off without affecting the entire heating system, the report noted.


Such inefficiencies have added to China's energy woes and forced it to rely increasingly on imported crude oil to keep power plants and factories running.


From January to October, China imported 99.6 million tons of crude oil, exceeding the 91 million tons imported in all of 2003, reports said, citing the General Administration of Customs.


Imports of crude oil in 2004 are expected to reach 120 million tons, the second largest in the world after the United States.


Source: Associated Press


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