China begins rationing power early

China to start power outages early this summer, following an increase in coal prices. (Getty Images)

Skyrocketing coal prices have forced provinces in China to begin rationing electricity early as power generation companies start to feel the pinch, according to an FT report.

While power cuts in China are a common occurrence in summertime, many provinces have started their rationing much earlier than usual, with Hunan, Zhejiang, Jiangsu and Anhui all implementing power cuts.

The cuts come shortly after the China Electricity Council announced that power shortages would be more severe than usual in 2011, saying that China would face its most severe electricity shortage since 2004.

Xue Jing, a representative for the council, said that the country could see a national shortage of 30m kilowatt hours during this summer, as electricity companies are put under financial pressure from escalating global energy costs.

According to the report thermal coal, which is used for firing 70 per cent of the nation’s power plants, has risen in price by a fifth in the last year but Beijing has raised electricity tariffs by just two per cent in the same period.
 

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