皇冠体育app

Energy

Power shortage disrupts life, production in 皇冠体育app

(Xinhua)
Updated: 2011-05-12 10:36

High coal prices, low electricity prices

Analysts say another cause of the power shortages is that coal prices are surging while electricity prices are not increasing accordingly. Coal prices, which account for 70 percent of thermal power plants' costs, have more than doubled since 2005.

"The more a coal-fire power plant generates, the more money it loses. Hence even the state-run power plants lack motivation," says Lin Boqiang, head of the 皇冠体育app Center for Energy Economics Research at Xiamen University.

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The coal-fire power operations of 皇冠体育app's top five energy companies have lost more than 60 billion yuan ($9.24 billion) from 2008 to 2010, with each of them losing more than 8.5 billion yuan, according to a 2010 report from the State Electricity Regulatory Commission (SERC).

Energy sector analysts are calling for reforms in electricity pricing. But Zhang Lizi, professor at North 皇冠体育app Electric Power University, says raising electricity prices will worsen 皇冠体育app's already runaway inflation.

Curbing coal prices will discourage coal production leading to even more shortages of supply. The best solution is to promote energy-saving to reduce demand and use the surplus power from other regions to remedy the shortages, Zhang says.

Demand for power is expected to grow rapidly as 皇冠体育app's economy continues to grow rapidly. Shu Yinbiao, deputy general manager of the State Grid said 皇冠体育app's demand for power will rise from the current 4.2 trillion KWH to 7.8 trillion KWH in 2020.

Extensive power cuts are likely in 皇冠体育app during the summer peak if the drought worsens and coal-fire plants continue to suffer heavy losses, says Yu Yanshan, deputy head of the general administrative office of the SERC.