State Grid Corp of China (SGCC), which oversees power systems in 26 provinces, has said it is prioritizing supplies to the Beijing Olympic Games as the summer power shortfall increases.

The power systems for the Olympics are operating smoothly, said Liu Tienan, vice-minister of the National Development and Reform Commission.

Beijing has invested over 20 billion yuan to increase its grid capacity by a third to ensure power supply for the Games, according to SGCC.

To meet the demand during the Games, Beijing has upgraded its power supply infrastructure in the past two years, adding over 100 transformer stations and nearly 1,000 km of power transmission lines.

During the Games, tens of thousands of workers under SGCC have taken charge of the city's power systems.

According to SGCC, the present power shortfall in the areas covered by the company is 17.16 gW, nearly five times the shortfall last year. Lack of coal is the main reason, causing 16.51 gW of the shortage, SGCC said yesterday.

The country should increase the cooperation of the coal and power industries to achieve more sustainable growth, said SGCC President Liu Zhenya.

Beijing's energy supply mainly depends on nearby provinces, with a large part of coal and power coming from Shanxi and Inner Mongolia. Although at present the coal supply for power generation is tight across the nation, provincial governments of both Shanxi and Inner Mongolia have reiterated they will try their best to ensure smooth energy supply to Beijing.

Shanxi, a coal-rich province, is among the worst hit in this summer's power crisis. But power shortage in the province has eased to below 1.5 gW, an improvement from the 5 gW forecast earlier, according to local media.

Inventories of thermal coal have risen to above 10 days of consumption, report the local media.

The situation has also improved a bit for other provinces. Liaoning has lifted power rationing after coal inventories at its key thermal generators rose above critical levels, according to the Xinhua News Agency.

Power firms have cut output in the face of rising coal scarcity and prices, and government caps on electricity prices, which have squeezed profits.

The country's five leading power generating groups -China Huaneng Group, China Datang Group, China Guodian Group, China Huadian Group and China Power Investment Group - will all see losses in their power generation business in the first half of the year.

(China Daily August 20, 2008)