Hydropowergenerationhasincreasedaswaterlevelsofthecountry'shydrolakescontinuetorise,butsluggishthermalpowersupplymeanselectricityshortagesaresettocontinuethroughsummer.

Demandhadnoteasedbecauseofthelatestpowerpricehike,buthydropowersupplyhasbeenboostedduetorecentheavyrains,saidXueJing,directoroftheStatisticalDepartmentofChinaElectricityCouncil(CEC)onFriday.

However,it'sonlyatemporaryreliefanditwon'talterthepreviousforecastedshortageofa30millionkilowatt(kw),accordingtosourceswiththeStateGridCorpofChina(SGCC)whodeclinedtobenamed.

JustweeksagothemiddleandlowerpartsoftheYangtzeRiverbasinlayparchedfromasearingdroughtandmanyhydropowerturbines--lackingwatertodrivethemsufficiently--wereswitchedoff.

Inamatterofdaysthesituationwasturnedaround.Downpourshittheregioncausingfloodsthatquicklyraisedthelevelsofhydrolakes.

Sluggishthermalpowerperformance

China'stopfivethermalpowergeneratorsreported12.16billionyuanoflossesinthefirstfivemonths,up7.86billionyuan($1.21billion)fromayearearlier,accordingtotheCEC.

Soaringcoalpriceswerethemainreasonforthelosses,accordingtotheCEC.

Thermalpowergeneratorsnowreport0.05yuanoflossesperkilowatt-hour(kwh)despitetherecenthikes,saidZhangShumin,chiefengineerwithChinaGuodianCorporationonFriday.

Chinaraisedpowerpricesdespitetheriskofexacerbatingthecountry'sinflationproblem.TheCPIroseto5.5percentinMay,wellabovethegovernment'stargetceilingof4percentfortheyear.

TheNationalDevelopmentandReformCommission(NDRC)inlateMayraisedelectricitypricesforindustrial,commercialandagriculturalusersin15provincesandmunicipalitiesby16.7yuanper1,000kwh.

However,ithasnotraisedpowerpricesforresidentialusers.

Themoveaimedtocheckgrowthofenergy-intensivesectorsandensurepowersupplyforresidents,accordingtotheNDRC,thecountry'stoppriceregulatorandeconomicplanner.

Zhangsaidfurtherpowerpricehikeswerenotlikelyinthesecondhalfyearifinflationcontinuedtorunhigh.

Pricingmechanismupgradeneeded

Thebestwaytosolvetheproblemwastoimplementanefficientpowerpricingmechanism,saidLinBoqiang,directorofChinaEnergyEconomyResearchCenterwithXiamenUniversity.

Themarketshouldbeatthecenterofpowerpricing,hesaid.

XieJun,ananalystwithGFSecurities,saidcoalpricesclimbed40to50percentlastyear,butpowerpriceshaveremainedalmostunchanged.

Somepowerplantshavesatidle,withtheiroperatorsclaimingtheywerebeingoverhauled,toavoidlossesinproductionduetoclimbingcoalpricesandrelativelylowpowerprices.

About85percentofthenation'spowercamefromthermalpowerplantsinthefirstquarter,accordingtotheNEA.

Regionalimbalancealsocontributestothepowerproblemwithheavyconsumptionintheeastandrichsupplyinthewest.

ThepowershortfallisregionalsinceprovinceslikeGuangdong,JiangsuandZhejiangrelyheavilyonenergy-guzzlingindustriesforeconomicgrowth,ChinaEnergyNetwork'sChiefInformationOfficerHanXiaopingsaid.

Hugepowerdemandfromenergy-intensivesectorsburdenspowersupply.

Theproblemdidnotrevealitselflastyearasmanyfactoriescutoutputtomeetthecentralgovernment'stargetofsavingenergyandreducingemissionsforthe11thFive-YearPlanperiod(2006-2010).

Butthisyear,thecountryhasseenasuddenrevivaloftheenergy-guzzlingsectorsandahugedemandforpower,saidLinWeibin,deputydirectorwiththeChineseEnergyandStrategicResourcesResearchCenter,BeijingNormalUniversity.

Thepowercrunch

Jiangsu,akeymanufacturingbaseineasternChina,forecastsabout11millionkwofpowershortagesthisyear,whichispossiblytheworstinthecountry.About68,000enterprisesintheprovincewillhavetosuspendproductionduringbusyhours.

Alreadythereisasignificantshortageofpowerin26provincesandmunicipalities,accordingtotheSGCC.

Powerconsumptionrestrictionshavebeenintroducedineasternandcentralregions,toensurepowersupplyforresidentialhomes,hospitals,schoolsandothersectorskeytopublicinterestsandstatesecurity.

The30millionkwofpowershortagespredictedforthissummeristheworstever,accordingtotheSGCC.

Thepowercrisiswillworsentoabout50millionkwofshortagesin2012and70millionkwin2013ifeffectivereformsarenotmade,accordingtotheSGCC.

[editor hannah]