CHINA'S power shortages may ease this summer due to slowing economic growth and gains in hydropower output, said the top planning agency.

There may be a peak supply shortfall of 18 gigawatts, or a gap of less than 3 percent from the maximum load, said Lu Junling, a deputy inspector at the National Development and Reform Commission, at a press conference yesterday.

Zhejiang, Guangdong, Jiangsu and Hebei provinces as well as Chongqing are likely to be the main affected regions.

But Lu warned that the smaller gap could prompt some companies in energy-intensive industries to expand quickly and this may overturn the situation, Lu said. He cited 2009 when China's power use fell in the first seven months but the year ended with a supply shortage of coal, power and oil.

China's power use rose 5.8 percent in the first five months, compared with 12 percent in the same period in 2011, amid sluggish economic growth.

Fitch Ratings said in a report this week the slowdown in power use may signal a further cooling in the economy and resulted in policy easing, like last week's interest rate cuts, the first since December 2008.

A rise in hydropower output since April has cut demand for coal, the fuel that fires the majority of China's power plants, Lu said. Hydropower output rose 36 percent in May, slashing thermal coal demand by 8 million tons, he said.

Coal supplies at major power plants stood at 93.13 million tons as of Sunday, up 48.3 percent from a year earlier.

Source:shanghaidaily.com