This year will signal the end of electricity supply shortages
providing a chance to secure reforms which will lead to a more
'market-based' power industry it was stated by top level industry
authorities yesterday.
The generating capacity of China's electricity-production
facilities is expected to reach at least 570 gigawatts by the end
of the year--enough to meet the growing power demand which is being
driven by the world's fastest-growing major economy, said Zhang
Guobao, vice minister of the country's top economic policy planner,
the National Development and Reform Commission (NDRC).
Zhang, speaking at a power conference hosted by the China
Electricity Council (CEC) over the
weekend, said that wide-spread blackouts were unlikely this
year.
"This marks a turning point in the electricity supply shortfalls
encountered a few years ago," Zhang said.
Industry leaders said power generation had improved
significantly in recent years and a 'ower surplus' could be
expected in certain areas within a few years. A "hard-won"
opportunity for the sector to continue with reforms had been earned
and there were opportunities to drive it towards?a sound
market-base. In turn it could be put on the 'sustainable
development' track.
Zhang said more facilities fuelled by hydro, nuclear and
renewable sources were to be commissioned and small, inefficient
and air-polluting coal-fired units would be closed.
The power industry's reliance on coal is expected to be reduced
to 70.2 percent in 2010 from last year's 75.6 percent, said Wang
Jianping, president of China Power Engineering Consulting (Group)
Corp.
Zhang said the government would improve the laws governing
China's power industry by amending the existing electricity laws
and devising more effective regulations.
China should also remain cautious while developing natural gas
power plants due to the unstable fuel supply, Wang Yonggan,
secretary-general of CEC, told the forum on Sunday.
The total capacity of natural gas power plants which cannot
fully operate due to gas shortages would reach six million
kilowatts in 2006.That was huge risk to the companies, Wang
said.
Besides, the rocketing international natural gas price makes
such energy a a poor option for generating electricity in the
long-term, he said. Wang also said the government should streamline
the electricity pricing mechanism and take advantage of new
opportunities.
"The government should introduce a system that will pass the
high fuel costs to end users, otherwise electricity producers will
suffer severe losses as fuel prices fluctuate," the
secretary-general told a press briefing on Saturday.
Last year, the profit of China's coal produced electricity
increased by only 2 percent, even though it generated 12.8 percent
more electricity than in 2004. This is caused by coal prices being
kept high while the cost of electricity is capped by the
government.
China has suffered from severe power shortages since 2002 as
electricity demand grew by an average 13 percent annually over the
past three and a half years. Much of this is driven by the rapid
growth of power hungry sectors such as the steel and aluminum
industries. .
It is anticipated that things will improve within the next five
years as new power generating facilities are commissioned and
government efforts to develop a more energy-efficient society begin
to pay off.
New power generation units with a total capacity of at least 70
gigawatts are expected to come on line within the next five
years--leading to an assembled generating capacity of 750 gigawatts
by 2010, said Wang Yonggan.
On the demand for power consumption is expected to rise to 3.45
trillion kilowatt-hours in the next five years--an annual growth of
6.75-7.0 percent which is much slower than the increase of at least
10 percent during the past five years, said Wang Jianping.
Wang Jianping said the slow-down in power demand came from
government efforts to curb over-investment in energy-intensive
sectors like steel and machinery and encourage the service and
high-tech IT sectors.
(China Daily, Xinhua News Agency February 20,
2006)