The Yangtze River Delta is one of the richest areas in China. But the region is poor in energy resources and in the last couple of years this economic engine house of the country was strangled by repeated power cuts.

Supply is most stressing in summer at the peak time. It is not unusual for a manufacturing facility to operate but four days a week. In the province of Zhejiang, which was hardest hit, blackouts averaged 11.32 days a month in the first half of 2004. Escalators in commercial centers were put to stop. Half the streetlights were off. And in some areas, even traffic lights were turned off on temporary basis.

The power shortage is not restricted to the Yangtze Delta, though. Started in 2001, it is a nationwide phenomenon with varied degrees of impact on different regions. Statistics show 24 provincial regions in China were forced to rationed power supply in 2004.

The problem took place when China witnessed an unprecedented growth of energy production, which was even faster than its GDP growth in the period of 2001-2005. Last year energy output reached the equivalent of 1.97 billion tons of coal, up 15 percent on a year before. In terms of installed power generating capacity, the growth rate was 14.5 percent or a net increase of 50,500 MW. That's the best world record.

Lift of living standards has propelled demand. But even with major cities like Beijing and Shanghai, the per capita consumption of electricity still cannot compare with that of developed countries. The odds are roughly 1,000 KWH to 8,000 KWH.

The major factor for the energy shortage was, rather, the overheated and improperly structured economy, accompanied by a wasteful style of energy utilization. "The fast growing economy is a basic cause for the power shortage," says Zhou Dadi, director of Energy Institute under the National Development & Reform Commission (NDRC).

The problem is partly institutional. China's Ministry of Energy was scraped more than a decade ago. The tasks of reserves prospecting, production, transport and sales of energy are divided among different ministries. Only months ago the Energy Bureau under NDRC was solely responsible for the overall planning of and coordination of efforts in the nation's energy development. Given an inferior status and insufficient manpower, the bureau had not performed its duty effectively.

A high profile Leading Group on Energy Development (LGED) was inaugurated in May. It comprises 13 top officials from relevant government departments and the military, headed by the premier and two vice premiers. A dedicated LGED Office of under-ministerial level was set up simultaneously. The two new government arms are expected to deal with strategic energy issues and coordinate efforts more effectively.

Source: Xinhua