In Spring, 2011, it was reported by The New York Times that due to increased demand and price controls shortages of electricity existed with additional shortages being anticipated. The government-regulated price electricity could be sold for had not matched rising prices for coal.
Price caps encourage wasteful use of cheap electricity and therefore producers are struggling to generate enough power overall.
China is unable to mine enough coal or transport it in sufficient quantities to meet demand.
The enormous volume of coal burning generates massive pollution.
Regional power shortages occur frequently when generation drops in one province or region and the lack of long-distance power transmission capacity means that power cannot be routed in from other regions where there is surplus capacity
It seems likely the cost of power will need to rise substantially over the medium term (2–5 years) to curb wasteful energy consumption and slow the rate of growth in electricity demand. In theory, the government could raise power costs by a similar amount across the whole of China in the interests of inter-regional equity.
China's power transmission system remains under-developed. There is no national grid. Instead there are six regional grids—five managed by the giant State Grid Corporation (north, north-east, east, central and north-west) and an independent grid (south) managed by the South China State Grid Corp (covering the light manufacturing hub around
Guangzhou-Shenzhen and the inland areas of
Guangdong, Guangxi and
Northern areas experience shortages in winter due to increased heating demand and problems with coal deliveries.
Eastern and southern areas are prone to shortages in late spring/early summer as temperatures and airconditioning demand rise, while reservoir levels and hydro output fall until the arrival of the summer rains in July and August. Guangdong and other southern provinces import substantial quantities of expensive fuel oil and diesel to run additional generation capacity to cope with the resulting power gap.
The lack of a unified national grid system hampers the efficiency of power generation nationwide and heightens the risk of localised shortages.
Even within these grids transmission capacity is limited. Many towns and enterprises rely on local off-grid generating plants. More importantly, inter-connections between the grids are weak and long distance transmission capacity is small.
The country's limited internal transport capacity risks being overwhelmed by the need to move record quantities of coal from the coal fields of the north and north-east to power generators in the central, eastern and southern areas.
The rail system has struggled to deliver adequate quantities of coal to the generators. Ice storms, flooding or droughts which disrupt rail and river deliveries quickly lead to shortages and power outages.
There are concerns about the quality and reliability of Chinese boilers, turbines and generators exported to India compared with Indian or Western equipment.
The central government has made creation of a unified national grid system a top economic priority to improve the efficiency of the whole power system and reduce the risk of localised energy shortages. It will also enable the country to tap the enormous hydro potential from western China to meet booming demand from the eastern coastal provinces. China is planning for smart grid and related Advanced Metering Infrastructure.
The main problem in China is the voltage drop when power is sent over very long distances from one region of the country to another.
Long distance inter-regional transmission have been implemented by using ultra-high voltages
(UHV) of 800kV, based on an extension of technology already in use in other parts of the world.
The government plans as many as eight long-distance UHV lines by 2015 and 15 by 2020.
1. HVDC Gezhouba -
2. HVDC Three Gorges-Guangdong
Following research and testing, SGCC has announced construction of the first long-distance UHV line from Sichuan, which is rich in hydro-electric potential, to the eastern load center of Shanghai.
Shanghai already receives hydro-electric power from the massive Three Gorges Dam on theChangjiang (Yangtze) at Sandouping in Hubei province. But the new DC 800kV UHV line would enable it to receive power from twice as far west from the Xiangjiaba dam on the Jinsha river (a tributary of the Changjiang much further upstream).
Xiangjiaba will have total generating capacity of 6,400 MW. When completed, the nearby Xilodu Dam will add a further 12,600 MW (about 55 percent of the size of the planned Three Gorges output), making it the world's third-largest hydro-electric dam, ranking after the Three Gorges and
Xilodu and Xiangjiaba are two of a series of massive new hydro projects that the government plans in south-western and western China to take advantage of the massive run off from the Himalayas and the Tibet plateau.
SGCC plans to bring a single pole of the
Xiangjiaba-Shanghai line into commercial operation within two years (2010) and the second pole a year later (2011). SGCC plans to complete a total of 10 UHV projects by 2015 and 15 by 2020.  In most cases, these will bring power from massive new hydro facilities in south-western China to the industrial and residential centers of the east.