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Energy-hungry China braces for power struggle as winter draws near
( 2003-12-08 10:36) (Agencies)

From freezing shoppers in Shanghai to schoolchildren doing their homework by candlelight in Hunan, the Chinese are preparing for a winter season rendered cold and dark by frequent energy shortfalls.

China's economy is rumbling ahead, and power suppliers have great difficulties keeping up, with potentially dire consequences for an increasingly energy-dependent economy.

"The shortage will have a strong impact on the Chinese economy, no doubt about it," said Xiao Yunhan, an energy expert at the Chinese Academy of Science.

"Aluminum makers, who depend much on electricity, will suffer a lot while the impact to parts of the chemical industry will be disastrous," he said.

In one indication of how bad the situation is, officials in China's northeastern rust-belt have even had to buy power from impoverished North Korea (news - web sites) this year.

In China's largest city Shanghai, shopping malls and departments stores will turn off their central heating systems every day between 10:00 am and noon to avoid the peak daily power usage period.

The measure is meant to ease an expected power shortfall of two million kilowatts in the winter season resulting from coal supply shortages and a seasonal drought.

This is only the latest measure by the Shanghai authorities, who have also shut down all small fertilizer factories and drastically curbed the operations of energy-guzzling, low-added-value companies such as small steel plants.

To a certain extent, energy shortages are just part of the price China has to pay for becoming a richer society, analysts said.

"The economy is growing and people's lifestyle is changing," said Wei Zhihong, an energy researcher at Beijing's Tsinghua University.

"Many urban residents are moving from burning coal to using electricity, and that inevitably creates bottlenecks."

Nationwide, the energy demand has risen 15.6 percent so far this year from the same period in 2002, forcing 21 provinces to limit power consumption, up from 12 provinces last year.

No other place is worse hit at the moment than central China's Hunan province, where droughts have caused hydropower plants to reduce their production.

In the provincial capital of Changsha, the different districts are being forced to share the burden, having their power cut off every four days.

Many energy-dependent shops and production lines in the city have to close down temporarily during blackouts.

Chronic power shortages are likely to continue for at least another two years in some Chinese provinces, the state media have warned.

While the power shortage reflects rising demand for electricity, resulting from 8.5 percent economic growth this year, there are also decisive factors on the supply side, according to Xinhua.

The coal supply has shrunk because the government has stepped up efforts to shut down illegal coal mines after a series of fatal accidents this year.

This matters, because small and medium-sized coal mines -- the main targets in this campaign -- account for about 40 percent of total coal production in China.

Under mounting strain because of the coal shortage, seven large power companies recently appealed to the government about the severity of the situation, according to state media.

China will need a whopping 2.3 trillion dollars for investment in energy-related projects in the period until 2030, according to the International Energy Agency.

But at least China should learn from this year's energy shortage, according to Xiao from the Chinese Academy of Sciences.

"Construction in the energy sector has been ignored for a long time," he said. "On the contrary, we have paid too much attention to the hi-tech industry."

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