BEIJING - China may have more power than it needs in just two years, as runaway construction to prevent a repeat of last year's crippling electricity shortages turns a crunch into oversupply, officials said on Wednesday.
The world's second largest power user also relies too much on dirty coal and needs to invest in cleaner generation, Zhang Guobao, vice-director of the powerful National Development and Reform Commission said at a conference in Beijing.
Shortages last year were the worst in two decades, and sent diesel sales bounding upwards as homeowners and businesses invested in diesel-powered generators to keep lights and air-conditioning on.
China is now building power stations at a mind-boggling speed -- this year alone it expects to add new plants with capacity roughly equivalent to all of Spain's -- that may have surprised even its own planners.
Its total capacity is set to climb to over 500 gigawatts by the end of 2005, meaning it will likely hit the government's target for 2010 of 650 GW up to three years early.
But the construction boom could swing too far, said Wang Yonggan, secretary general of the China Electricity Council, an industry association.
"Next year supply will still be a little tight, and by 2007 overall it will be balanced with possibly a little in surplus," he told Reuters on the sidelines of the conference.
This year, improved coal transport and heavy rains appear to have limited the impact of the shortages predicted to be three quarters the size of last year's, contributing to weaker than expected oil demand growth as some private generators stay idle.
But Shanghai won't be reversing a decision to switch off most of its bright lights in summer for a little while.
"We are just doing next year's prediction now and it seems many areas, like the eastern costal region and the north, will still have shortages," said Shu Yinbiao, vice-president of the State Grid Corporation of China.
"But the level should be a lot, lot less intense," he added.
COAL DOWN
Senior officials are looking beyond short-term worries about the source of power.
"By 2007 the situation will be more or less balanced," said the NDRC's Zhang, who on Tuesday told state media he was fretting about overcapacity at the end of 2006.
The government is trying to phase out small-scale and less efficient plants, and wants to tackle the heavy use of coal, which last year generated around 80 percent of the country's power, Zhang said.
Although massive coal deposits make it a relatively cheap and secure form of generation, coal contributes to the acid rain plaguing around a third of the country and the smog that blankets many of its cities.
"Most of the projects proposed by local governments are still coal-fired generators," Zhang said.
"The NDRC hopes this trend can be changed by adding more hydropower, nuclear power and renewable power. But ... the NDRC is under great pressure," he said, adding that China's power generators structure will get even worse."
Story by Emma Graham-Harrison
REUTERS NEWS SERVICE
