China urges more power conservation amid shortage

SHANGHAI, Aug 2 (Reuters) - China's central government, grappling with the country's worst electric power shortage in years, on Saturday ordered local authorities around the country to work harder to conserve energy.

"Fully understand the importance and urgency of conserving oil and electric power," the State Council, or cabinet, said in notice to the administrations of provinces and big cities.

The notice, posted on the government's website (www.gov.cn), did not contain new policy initiatives. But it said China's energy efficiency remained well below the standards of developed countries, and scolded unnamed government bodies and projects for using energy wastefully.

"Tightness in supplies of oil and electricity has become a major factor limiting economic and social development," it said.

The cabinet urged local authorities to recognise that while both conservation and developing new energy supplies were key to resolving the crisis, conservation was the most important method.

Local authorities were told to enforce energy efficiency standards for automobiles and factories, expand public transport systems, promote the use of energy-efficient technologies, and push schemes to limit air conditioner use in public places.

They were also ordered to scrap locally conceived schemes offering preferential electricity prices to energy-intensive industrial companies such as steel and concrete producers.

China is facing its worst power crisis since 2004 as generators cannot source coal supplies or refuse to pay soaring coal prices while they have to sell power at state-capped prices. More than a dozen provinces have imposed power rationing.

Analysts believe the coal shortage may lead power producers to boost oil-fired power generation, causing China to increase its imports of diesel and fuel oil. (Reporting by Andrew Torchia; editing by Ben Tan) (andrew.torchia@thomsonreuters.com; (8621) 6104-1761))