China's power shortage, which has decreased in 2005, will ease further in 2006, China Securities Journal quoted a report by a government think tank as saying Thursday.

The electricity shortage has already become a major economic bottleneck, especially in the coastal regions, which have sustained double-digit growth for the past decade, the report said.

The total power generation reached 1,773.9 billion kilowatt hours (kwh) over the January-September period, up 13.4 percent year-on-year, according to the report by the Development Research Center under the State Council.

China would generate 2,393.1 billion kwh in 2005, up 12.4 percent year-on-year. The country would need 2,663.7 billion kwh of electricity in 2006, up 11.3 percent year-on-year, yet lower than the 14.8 percent in 2003 and 13.6 percent in 2004, the report predicted.

The slowdown of power demand, high growth of electricity generation, enhanced transmitting capacity of grid and sufficient supply of water and coal all contributed to the ease, it said and added that the installed capacity would reach 587 million kilowatts by the end of 2006.

Operations of power enterprises have made a turnaround thanks to a new pricing system, which allowed the electricity price to float with coal price within the prescribed range set by the government.

Over May-Aug., the electricity industry realized a profit of 29.387 billion yuan (about US$3.62 billion), up 51.5 percent year-on-year, the report said and predicted the industry would make a profit of 117.7 billion yuan in 2006.

However, intensive competition caused by supply and demand balancing will bring heavy pressure to the low-tech and small-sized companies, it said.

(Xinhua News Agency November 25, 2005)