January 16, 2008

China Southern Power Grid, owner and operator of power distribution networks in the country’s southern provinces, will seek to buy more power from the Three Gorges dam and Hong Kong to plug a supply gap caused by the worst coal shortage in the southwestern region in five years, SCMP reported.

Southern Grid vice president, Xiao Peng, told SCMP that 10,300 MW of power plant capacity in the five southern provinces it covers were forced to shut down due to a lack of coal. A sharp jump in coal prices and Beijing’s closure of small mines on safety concerns were largely to blame for the shortage, he said.

Another problem for Southern Grid was the severe drought in Yunnan, a key producer of hydropower.

Southern Grid is planning to list on the Shanghai Stock Exchange but needs to improve its profitability first, Mr. Xiao said. The company posted a ‘profit’ of about 16 billion yuan last year, which is low considering it had nearly 300 billion yuan of assets as of the end of 2006.

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