The pressure on coal supplies and drop in electricity generated by hydropower plants suffering low water levels, have caused rolling blackouts in some regions.

Analysts said the shortfall in supply is expected to be alleviated in coming months, but then to intensify again in summer when consumption once again peaks because of air conditioning use and industrial production.

However, the lives of local residents during the week-long Spring Festival period are not expected to be affected partly thanks to limited industrial uses.

More than 10 provincial regions have lost power sporadically since late December, including Zhejiang, Jiangsu, Sichuan, Hebei,Henan, Shaanxi, Shanxi and Gansu provinces, Shanghai and the Ningxia Hui Autonomous Region.

Local power companies have to cut off power to residents during peak hours, to guarantee enough supply for industrial production.

In Southwest China's Chongqing Municipality, daily electricity consumption has reached a record high this month. "We have already shifted the off-days of big industrial users from Saturday and Sunday to Monday and Tuesday or Wednesday and Thursday, to avoid too much electricity demand on workdays,'' said Liao Zhenghe, director of the electricity distribution center of the city.

In Sichuan Province, the electricity delivery has to be stalled for more than 880 times a day this month as the supply exhausts.

Analysts said the power cuts were mainly caused by the brisk economic growth, especially the rapid industrial growth which accounts for almost 80 per cent of the total consumption.

Industrial output growth has increased by 14.9 percent in December, the fastest growing month last year. That growth is expected to be maintained at a rate of 14.5 percent this month.

The situation was exacerbated by this year's long, hard winter which sent electricity consumption for heating soaring compared to previous years.

On the supply side, a falling water level has reduced the hydropower supplies, causing major problems for those grids such as that in Sichuan Province, with a heavy reliance on hydropower. The water level in key reservoirs has fallen by a quarter since October compared with a year ago, statistics show.

"About 10 percent of the demand can not be satisfied in Sichuan during the low water season from December to April,'' said Xu Yuanjue, spokesperson for Xichang Power Co.

Demands on coal supplies and lower output levels also contribute to the power shortage, analysts said.

More significantly, said Wu Jingru, an electricity expert with the State Development Bank, an underestimate of electricity demand made several years ago resulted in too few power generators being constructed in recent years.

China will have an annual generating capacity shortfall of 20 million kilowatts in the next two years, Wu warned.

Although the shortage has caused disruption to electricity supplies, government officials do not see it as a looming crisis.

"The shortage is severe in some places, but it is neither a nationwide breakdown, nor ever lasting,'' said Shi Yubo, vice-chairman of the State Electricity Regulatory Commission, the industry watchdog, at a national conference.

"A general prediction for this year is that demand and supply will be balanced, but with some areas sometimes experiencing difficulties,'' Shi added.

Still, uncertainties are daunting, including possible coal price hikes, and risks of the on-going sweeping reforms in the power industry, analysts said.

(Shanghai Daily January 31, 2003)