China may face a peak power shortage of up to 40 gigawatts in winter and spring as rising demand outpaces expansion in generation capacity, an industry group said yesterday.

Other factors contributing to the shortfall include low coal quality which could lead to unplanned power plant maintenance, and a lack of coordination between power generators and distributors, according to the China Electricity Council.

China's estimated total generation capacity may total about 1,050GW at the end of this year, a rise of about 8.8 percent year on year, but the country may still face a total peak deficit of 30-40GW.

Industry officials said rising coal prices, which will erode the profit margins of power generators, could also worsen the shortfall in coming months. The shortfall may affect the main manufacturing hubs of Guangdong and Zhejiang provinces as well as Henan and Hunan provinces in central China, according to local grid operators.

China's power demand is forecast to grow 13 percent in the final quarter of this year and 12 percent for the whole year, the CEC said.

A State Electricity Regulatory Commission official, however, said last week that China will suffer a less severe power shortfall in the winter and spring than during the summer, which was blamed on high temperatures, tight coal supplies and low precipitation that affected hydropower output.

The summer shortfall also prompted the government to increase power tariffs in some provinces to spur power production and restrict demand from energy-guzzling industries.

Transmission problems have also sparked power shortages during the peak demand season.

A Barclays report earlier this year estimated China's northern and northwestern regions have generating surpluses of up to 14GW each but they cannot be effectively channeled to power-short areas.

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