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FAQ Message |
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 Please analyse the changing situations in China's power market. |
At present, the shortage in electricity is still severe. If we look at the increase in electricity demand and the increase in installed capacity in the past few years, the later could not match the former, thereby creating a shortage in electricity which is becoming more and more severe. In 2003 and 2004, there were more than 24 provinces (including autonomous regions) in China encountering severe shortage in electricity. Even in 2004 when the construction of power plants accelerated , the increase in installed capacity across the country still slightly lagged behind the increase in electricity demand.
While it is reasonable to expect that the problem of the shortage in electricity could be gradually relieved in the next two to three years, a situation of over-supply is unlikely to happen in that span of time. Assuming the increase in electricity demand in each of the next three years is still above 10%, approximately 50,000 to 60,000MW of installed capacity would be needed each year to meet the annual increase in demand alone, let alone the current shortage in electricity, the surplus capacity required for a safe operation of the grids and additional capacity required for replacing obsolete units each year due to various reasons. Therefore, it would be unlikely to reach an equilibrium in the near future, not to mention an over-supply. At present, the capability of China in building electric power facilities is limited to approximately 60,000MW per year. Such limitation also restricted a required capacity to commence operation all at the same time. On the other hand, there has been a structural change in the growth of demand electricity in recent years. In 2004, the electricity load of the BTT area in winter exceeded that in summer for the first time. A balance at the regional peak load was warranted by a maximum output by the units in the region, a management of the demand, a planned restriction on peak-level demand and, in the most extreme cases, a shut down of units. There is still room for electricity demand to be fully released.
After a certain period of time, when supply basically meets demand, China's power industry will introduce power pooling. Datang Power has long been actively preparing itself for the future market competition through strategic deployment of its power plants, vigorous cost controls and asset structure adjustments.
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