Hydropower increase won't end electricity shortage (2)

08:50, June 26, 2011      

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The National Development and Reform Commission (NDRC) in late May raised electricity prices for industrial, commercial and agricultural users in 15 provinces and municipalities by 16.7 yuan per 1,000 kwh.

However, it has not raised power prices for residential users.

The move aimed to check growth of energy-intensive sectors and ensure power supply for residents, according to the NDRC, the country's top price regulator and economic planner.

Zhang said further power price hikes were not likely in the second half year if inflation continued to run high.


The best way to solve the problem was to implement an efficient power pricing mechanism, said Lin Boqiang, director of China Energy Economy Research Center with Xiamen University.

The market should be at the center of power pricing, he said.

Xie Jun, an analyst with GF Securities, said coal prices climbed 40 to 50 percent last year, but power prices have remained almost unchanged.

Some power plants have sat idle, with their operators claiming they were being overhauled, to avoid losses in production due to climbing coal prices and relatively low power prices.

About 85 percent of the nation's power came from thermal power plants in the first quarter, according to the NEA.

Regional imbalance also contributes to the power problem with heavy consumption in the east and rich supply in the west.

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