China hikes electricity rates for the first time in two years

It is pretty amazing that China has experienced rapid growth without rate hikes for electricity, but such has been the case for two years. The resulting power shortages are getting dire according to “China Raises Power Prices as Shortages Loom“:

“China’s electricity demand is running so far ahead of supply that it is expected to be short of 30-40 gigawatts of power capacity this summer, twice the deficit caused in Japan by the earthquake and tsunami on March 11.”

China is hiking rates by 3% for some users in an apparent effort to cool demand and/or encourage the production of more supply. It is feared that increases in supply will only further drive up the price of coal and offset any profits power companies would have otherwise earned.

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2 Comments on “China hikes electricity rates for the first time in two years”

  1. Brewskie says:

    I know China’s largest power companies have been losing money because of price controls. Droughts in parts of China have been having an effect on power generation, too.


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