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China Plagued by Power Shortages

China is facing a serious power shortage throughout the country, amid tight coal supplies. VOA's Stephanie Ho reports from Beijing.

It is a cold winter in most of China, an especially bad time for a power shortage.

One of the main reasons for the outages is that there is not enough coal in the country. Coal-fired power plants provided about 83 percent of China's electricity output in 2007.

Henry Li - an analyst with Hong Kong investment bank Core Pacific-Yamaichi - says the main problem is a shortage in coal, which is burned to create electricity.

"Due to the surging production costs of thermal coal, and the excess in thermal coal demand, the thermal coal prices has risen substantially, last year," he said.

Li says the supply shortages have been exacerbated by the government's closure of small, independent coal mines.

Another problem is that snow and sleet have hampered coal transportation.

Chinese state media are reporting a nationwide power shortfall of 70 gigawatts, which is equivalent to the entire generating capacity of Britain. As a result, brownouts (lowered voltages) have hit at least 13 provinces.

"China Electric Power News" says an intermittent blackout that started earlier this week in the central city, Wuhan, is the city's worst since 1997. Other affected areas include the manufacturing hub, Guangdong, and the coal heartland, Shanxi.

The Chinese government has maintained a tight cap on electricity prices. Experts have predicted this could lead to shortages, as producers find it costs more to produce coal than they can receive by selling it.

Li says he thinks Chinese leaders will continue to keep a lid on energy prices until after the middle of the year, because they are more concerned with controlling rising inflation. He says the problem of energy shortages could still get worse before it gets better.