China Grid Prioritizes Power Supply for Olympic Games

By Wang Ying

Aug. 19 (Bloomberg) -- State Grid Corp. of China, distributor of electricity in 26 provinces, said it is prioritizing supplies to the Beijing Olympic Games after the nation's power shortfall increased five fold.

The deficit has reached 17 gigawatts from the year earlier in the areas covered by State Grid's network, the Beijing-based utility said in a statement on its Web site today. The situation may worsen should coal supplies fail to improve, it said.

China, which relies on the fuel for almost 80 percent of its electricity generation, is grappling with a sixth year of power shortage. Local governments have been forced to limit consumption in the provinces of Shandong, Hubei, Shanxi, Henan and Liaoning while 167,000 State Grid staff ensure enough supplies to Olympic venues, the company said earlier this month.

The country should take ``early preparations'' to stockpile coal at power plants for the winter season when demand will rise, Liu Tienan, vice chairman of the National Development and Reform Commission, said in the statement. The nation will boost the share of nuclear and hydro power generation and ensure supplies to households and ``key'' users, according to today's statement.

Olympic Demand

Beijing's maximum electricity demand rose by 21 percent to 11.6 gigawatts on Aug. 9, the first day of the sporting event, State Grid said in an Aug. 12 statement. Supplies to the capital city is ``adequate,'' it said.

The world's biggest coal producer and consumer will take additional steps to boost domestic production of the fuel to help ease the nation's electricity crisis, Zhang Guobao, head of the National Energy Administration, China's top energy policy planner, said yesterday.

Coal shortfalls may be reduced when the government's measures take effect, Zhang said at a press conference in Beijing yesterday, without giving details.

Almost 3 percent of the country's coal-fired generation capacity was left to idle last month because of the coal deficit, State Grid said at the time.

Power supplies to large metropolises such as Shanghai and Beijing weren't affected by the coal shortage, according to Zhang. The government has increased natural gas supplies to power plants in Shanghai, China's eastern commercial center, he said yesterday.

State Grid is the bigger of two electricity suppliers in China. China Southern Power Grid Co. supplies five provinces in the mainland.

To contact the reporter on this story: Wang Ying in Beijing at wang30@bloomberg.net;