Power play just drama?; Drought may have less to do with China's electricity woes than a generating industry using scare tactics on Beijing in a bid to increase prices and profits
South China Morning Post Ltd via PennWell Corporation / June 14, 2011... "We believe the power shortage is exaggerated," economist Lu Ting at Bank of America-Merrill Lynch China writes in a research note. "And it is unlikely that China will see a major disruption in power supply."
As Lu and some other analysts see it, the power pessimists have failed to account for increases in China's power capacity since 2004, when the nation sweltered through its worst-ever power shortage. Yes, power supplies will probably fall short of demand, they say, but not as severely as some forecasts show. And any shortages are likely to be limited to certain areas and certain times of day.
"It isn't appropriate to exaggerate the impact of the shortage, or even to call it a national power-supply crisis," says the China Electricity Council, which represents generating firms. "This kind of deficiency is different from the nationwide, sustained blackout seen in the past."
The council's data show that China's power capacity has more than doubled in the past six years. In percentage terms, the council said, this summer's shortage may be half that of 2004.
Sounding a more dire warning is the State Grid Corporation, the largest power-distribution firm.
"This year's power supply is set to be the tightest in recent years," Shuai Junqing, the firm's deputy general manager told a televised press conference last month. "The deficiency may exceed that in 2004 when the nation suffered the worst-ever power shortage." Shuai said generating-capacity shortage during peak consumption periods this summer could amount to 30 GW to 40 GW, with eastern China getting hit harder than northern and central parts of the country. The total shortfall could rise to 49 GW next year, and to 70 GW in 2013 if planned high-capacity long-distance power transmission lines can't be completed on time. ...
... State Grid said last month in a circular for potential bond investors that it posted a loss of 1.7 billion yuan in 2009, the only losing year from 2008 through the first nine months of last year. That loss prompted the firm to cut last year's power-grid investment by 12.5 per cent from the year before. ...