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FAQ Message |
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 Please state the Company's analysis and views on the electricity supply and demand situation for 2007, both nationwide and in the Company's major service areas. |
In 2006, the nation's electricity demand grew by 14% over the Previous Year, while installed capacity increased by approximately 100,000 MW to reach 622,000 MW, up 20.3% over the Previous Year. Looking ahead into the next few years, the growth in power demand will remain relatively robust. Taking into account the structure and the stagewise characteristics of China's current economic development as well as the further implementation of social energy conservation and consumption reduction programmes as a whole, we estimate conservatively that power demand growth will remain at around 10% per annum for the next few years, with the electricity elasticity being slightly higher than 1. As regards power supply, it is a challenge to maintain substantial growth on the expanded base of nationwide installed capacity. In addition, given China's concerns about energy conservation and consumption reduction as well as sustainable development, the scale of construction commencements of the country's new power projects is expected to be appropriately contained in the later years of the Eleventh Five-Year Plan. Moreover, the policy promulgated recently calling for the closure of 50,000 MW of small generation units during the Eleventh Five-Year Plan will effectively check the rapid growth in gross installed capacity. It is anticipated that the 2006 peak growth in nationwide generation unit commencements will be fully digested in 2007, and that the utilisation hours of generation units will stabilise with a moderate increase starting from 2007.
With the rapid development of its power generation business in the national market since this year, the Company's major service areas now cover the BTT area, the eastern coastal provinces, as well as other provinces and regions such as Yunnan, Chongqing and Shanxi. The BTT Power Grid, a service area in which the Company's current operating power plants are concentrated, remains one of the regions in China with the strongest economic growth, with its historical GDP and electricity demand growths both above the national averages. Looking into the future, the Company believes that the growth in electricity demand will be driven substantially by major economic growth engines such as the 2008 Beijing Olympic Games, major developments in the Tianjin Binhai New Area and the construction of the Bohai Rim heavy chemical industry zone in Tangshan region with Caofeidian as the centre. Electricity demand from this area is expected to grow reasonably above 12% per annum in the next few years. The growth of planned new installed capacity in the BTT Power Grid is expected to be slightly lower than demand growth in the next few years, with the utilisation hours of regional power generation showing a continued rebound.
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