According to Chinese Government, the energy demand throughout the country is exceeding supply by 70 billion Watt, approximately the total electricity generation output in the whole Britain.
The reason for this shortage, in the viewpoint of analysts, is due to the increasing price of coal when it is true that 80% of power electricity in China is derived from coal. Unexpected cold weather accompanied by heavy snow in many areas in China in this winter has obstructed coal transportation and ruined electric cables, which has exacerbated the energy crisis.
A number of power plants have closed or retained operation at an indifferent level. They cannot stand the losses because the electricity tariff remained unchanged while coal price is escalating day by day.
As said by Mr. Yang Fuqiang, the fact that electricity tariff is fixed while the price of coal is allowed to float should be looked into.
In the opinion of analysts, it is difficult to raise the electricity tariff right away in China since the nation is facing severe inflation. Moreover, the consumer price index of China has already achieved a new record in 2007 and the Beijing Olympic is coming soon, so the Chinese Government needs to maintain the stabilization by issuing a regulation in which energy price, electricity tariff included, is not allowed to increase.
From VTV