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Storms expose structural problems behind failure of power networks

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Underinvestment in power grids, a growing tendency to rely on long-distance electricity transmission from remote regions and a lack of contingency planning are structural problems exposed by the snowstorm-induced power cuts on the mainland, according to analysts.

As millions of people in central provinces mark the Lunar New Year in their power and water-deprived homes, it is time for officials at the nation's power and economic policies planning authorities to reflect on what could have been done to prevent or reduce economic losses from such disasters.

While snow and ice storms of the magnitude seen last month may happen only once in half a century, a stronger power distribution system and better contingency planning could have lessened the damage.

Analysts say vulnerability of the power grid system stemmed partly from underinvestment, as the system's expansion lagged behind generation capacity, which more than doubled in the past five years, at an average annual rate of 16 per cent.

'China's power grids are not well-connected and are exposed to structural risks as the grid companies were not catching up with the expansion of the power producers,' says Fitch Ratings director of energy and utilities Simon Wong.

According to a Lehman Brothers research report citing State Electricity Regulatory Commission figures, the central power grid had an average reliability rate of 99.82 per cent in 2006, with the average household suffering 16 hours of power cuts that year. The grid covers Chongqing city and Henan, Hubei, Hunan, Jiangxi and Sichuan provinces, most of which were hard hit by the winter storms.

The regional grid ranked first in terms of population but second-worst among the nation's six regional grids on reliability, after the sparsely populated northwest grid.

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