By the end of last year, Chengdu city, Sichuan province, suffered the worst power shortage ever, with 345 companies stopping production during the New Year.

Zhejiang, Jiangsu, Shanxi and west of Inner Mongolia have been the worst affected in this nation-wide power shortage. Though Sichuan lost the most money, it was not even on the list of having the most severe power shortages.

On Dec. 30, according to the China Economic Times, the power usage and the shortage of electricity in the city of Chengdu were 12.225 million degrees and 657 thousand kilowatts, respectively. The city had restricted power supply to 770 power lines and this exceeded the city’s third-degree warning index. On the last day of the year, the planned power supply reached the city’s record low, 35.412 million degrees.

On Dec 29, the Chengdu Economic Commission and the City Electricity Bureau restricted the power usage of the light decoration projects and the city’s illumination. Also, the entertainment businesses were not allowed to set their indoor temperatures higher than 64 degrees Fahrenheit. The government also targeted 8,181 non-continuous production companies with less than 315 kilovolt-amp capacity and provided them power in turns. One hundred and twenty-six large and middle-sized companies had to avoid the peak time of power usage in groups.

From Jan. 1-3, the city of Chengdu asked a total of 345 companies to completely stop production in order the guarantee the residential power usage.

Earlier, the China Business Times reported that power shortage had caused the country severe losses. The provinces with the worst power shortage were Zhejiang, Jiangsu, Shanxi and west of Inner Mongolia. These provinces were constantly under restricted power supply. On Dec 22, experts calculated that in the past five years, power shortage has cost the nation more than 1 trillion yuan directly and indirectly.

Experts said that Shanghai is counted as having “normal shortage,” Jiangsu province “severe shortage” and the Zhejiang province is entering a “power crisis.” The maximum power shortage during the peak time in Zhejiang is more than 7.5 million kilowatts, which directly created a 100 billion yuan loss in Gross Domestic Product.

To make it worse, foreign companies are usually listed as higher priority but are not guaranteed with power supply this time. Nokia had sent a letter to the mayor of the city of Hangzhou seeking to remove its investment.

Chinese officials have different explanations for the continual power shortage. “The economy grows too fast and raises people’s living standard,” says Zhang Guobao, the assistant director of China’s National Development and Reform Commission. Shi Dan, director of the Energy Economy Research Center of the Chinese Academy of Social Sciences, thinks that the problem originated from the official slowdown of the power development. A typical example would be the policy of “Not needing coal-powered electricity for three years.” According to Wu Jingru, a senior expert in planning electricity power and consultant of the China Development Bank, power shortage in China started in 1969 and after 20 years of development, the shortage was balanced for the first time in 1998. Unfortunately, the policy of “Not needing coal-powered electricity for three years” also started then.

Before 1997, the average power development in the country was at least for 20 million kilowatts per year. In 1998, the country decided the demand for electricity would not increase any more and the electricity development dropped abruptly to 10.21 million kilowatts. In 1999 and 2000, it dropped even more, to 6 million kilowatts. The decrement stopped in 2001. However, a new wave of power demand quickly accelerated due to rapid economic growth. From 2000 to 2003, the power usage increased 11.36 percent, 9.03 percent, 11.6 percent and 15.4 percent each year. However, the increase in power generators was far behind the electricity demand. Plus the new power projects did not make proper adjustment for the new demand either. All this caused 20.35 million kW power shortages in 2002 and 44.85 million kW in 2003.

The Chinese government is still controlling the scale of power development. The current overheated investment in power development is directly caused by the power shortage. Controlling the scale of it simply sounds unreal. People have learned from “Not needing coal-powered electricity for three years” that whoever listened to the National Development and Reform Commission would end up in a power shortage. Zhejiang province executed this policy most thoroughly and it is now the province with the worst power shortage. Those that did not follow the policy closely are better off now. According to Wu Jingru, a lot of local governments are having special projects based on their own planning and demands. They keep the plans secret so that no one knows what the rest are doing. The situation is fairly unregulated now.

To solve the power shortage problem, Sichuan province plans to fully utilize the hydroelectric power bases along the Dadu, Yalong and Jinsha rivers, and to build major hydroelectric power stations near four major coal production areas, Yibin, Luzhou, Guangan and Dazhou. Also, Sichuan province will upgrade the power supply construction in the central major power usage area of Chengdu and Deyang. The province is also speeding up the process to make use of middle-sized rivers and helping small power plant construction in remote mountain areas.

The China GuoDian (state power) Group spent 2.62 billion yuan last December to update and expand the machines in the Huarongshan Power Plant. A person from the Chengdu Electricity Bureau said that the shortage did not form in just one day. The supply of coal in 2005 is still tight and the shortage will continue until March. The overall situation might be better by 2006.