China has started rationing electricity in an attempt to avoid an energy shortage in the country.
China is accustomed to power cuts: the country experiences them every summer as energy demand peaks. But the Government has warned that increases in coal prices and a decrease in hydropower output could make this year’s power cuts more severe.
The country’s state-owned power companies are losing profits as the price of coal goes up. The five biggest producers have reported losses of 10.57 billion Yuan (£995 million) since January 2011, according to the China Electricity Council.
The Government is now allowing coal-fired power plants to raise tariffs in some areas to prevent power cuts. Exporting diesel has also been banned to try to meet domestic demand.
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