China cannot escape from power shortages this year, and the
electricity tension will still be tough in the next two or three
years, revealed Chinese experts, who have been reflecting upon
China's extensive power crisis this summer.
The State Power Grid Corporation predicted that the country's
total electricity consumption would reach 1.84 trillion kilowatt
hours this year, 12.3 percent more than in 2002. This implies a
domestic power deficiency up to 10 million kilowatt hours this year
even taking into account the generating capacities of power
projects currently under construction.
Since the end of June, blackouts were imposed in 19 provinces
and municipalities, including the prosperous Yangtze River Delta,
to lighten the pressure on the overloaded power grids.
Although scorching weather has been widely blamed the sharp rise
in electricity consumption, the limping construction of electricity
facilities, which lags far behind the pace of the country's
economic development, is believed to be the essential cause of the
recent energy shortages, said Xu Keda, a State Council official in
charge of equipment for the Three Gorges Project.
China's policy-makers are pondering responsive market
strategies, hoping to accelerate electricity facility construction
and balance power supply and demand by "breaking monopoly and
introducing competition."
Following the splitting up of the State Power Corporation at the
end of last year, China is planning to create six regional
competitive power markets in three years in a determined move to
break up the traditional province-based electricity monopolies.
Meanwhile, experts consider that investment reform is also a key
to tackling the power shortage problem. Complicated examination and
approval procedures have delayed investment, which would otherwise
contribute to more constructions of power supply facilities.
Fortunately, open market strategies have been gradually
introduced into the investment mechanism. In recent years, China's
private enterprises have invested heavily in hydropower stations,
once a forbidden zone for non-governmental businesses.
In mid August, the Beijing-based private company, Huarui Group,
invested a total of 12 billion yuan (US$1.45 billion) to launch the
construction of Jin'anqiao Hydropower Station on the upper reaches
of the Yangtze River, the largest privately invested hydroelectric
project in China.
In east China's Zhejiang Province, which boasts the country's
most developed private sector, many non-state enterprises, like
Huiming, Guangxia and Songcheng, have started to invest in
southwest China's Guizhou and Sichuan provinces, which are rich in
water resources.
Some of these enterprises have even prepared to deliver
electricity from their private stations to the country's
energy-starved eastern areas, if state policies allow this.
China is also carrying out reform of the electricity price by
loosening state control.
The recently signed contracts for selling and distributing Three
Gorges electricity have attracted attention not only because they
can help mitigate power shortages, but also because this move
marked a key transition in electricity price determination from
state-designated to market-regulated.
According to the contracts, electricity from the first group of
generating units will be sent to local grids in Shanghai and
Chongqing municipalities, and the provinces of Jiangsu, Zhejiang,
Henan, Hubei and Hunan, which suffered severe energy shortages this
summer.
Two more generating units at the Three Gorges will also go
online a month earlier than scheduled for this year, to further
increase the generating capacity by about 1 million kilowatts, said
Xu Keda.
(Xinhua News Agency August 23, 2003)