Lights out for China in 2012

Electric power is definitely a huge problem for China this year.

China is staring at a possible shortfall of 30-40 million kilowatts this year, reflected in regional and seasonal shortages, said the China Electricity Council (CEC). The country will have to contend with tight power supplies due to rising demand and stagnant growth in new power plants.

As a result, growth in electricity consumption is expected to be 9.5% in 2012, down 2% from the previous year. Investments in power project investment should come to US$117.35 billion this year, almost unchanged from 2011, said CEC.

China’s 12th Five-Year Plan period (2011-2015) projects power consumption growth at 8.8% annually, reaching from 6.02 to 6.61 trillion kilowatt hours by 2015.

Equally worrisome is that CEC predicts a sharp fall in thermal power investments, mostly because of the low profitability of thermal power projects and China's campaign to limit carbon emissions.

Investment in clean energy (including wind power and hydropower) will jump over the next few years, however.

China's installed clean energy capacity will increase by 26 million kilowatts by 2015. Hydropower and solar power are expected to contribute 17 million kilowatts and 3 million kilowatts, respectively.