People ate breakfast by the light of smartphones and shopkeepers turned on generators as cities across China enforced power cuts Wednesday to meet official conservation targets and ease shortages in some areas.

News reports blame high coal prices they say make power companies reluctant to meet booming demand, while economists say the real motive is political: Officials are under pressure to curtail energy use to meet official targets.

In Shenyang, the northeast's most populous city, restaurant owner Li Yufeng used a battery from an electric bicycle to run a pot for noodles after seeing a notice power would be switched off at 7:30 am. Li said he started work two hours early, at 6 am, to prepare chicken, sauces and other dishes. There are some impacts, but not a big impact,&nbsp;said Li as customers ate by smartphone lights.

Factories in China's busiest manufacturing provinces have been ordered to suspend production for up to a week, prompting concern global supplies of smartphones and other goods might be disrupted. Now, urban neighbourhoods are being blacked out, triggering pleas on social media for the government to solve the problem.

China's power consumption is growing at almost double its usual rate, while the ruling Communist Party is trying to reduce energy intensity, or the amount used per unit of economic output.

The power cuts come as global leaders prepare to attend a UN environmental conference by video link on October 12-13 in the southwestern city of Kunming. That increases pressure on President Xi Jinping's government, as the meeting's host, to show it is sticking to emissions and energy efficiency targets.

The cuts are largely driven by energy consumption control measures, with power shortages affecting another few provinces,&nbsp;Lara Dong of IHS Markit said in an e-mail.

This is in line with China's decarbonisation ambitions, she said.

Watch

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The Cabinet's planning agency warned in August that 20 regions had exceeded energy use and pollution targets after manufacturing rebounded from the pandemic. The government has ambitious plans to make the economy cleaner and more energy-efficient, so failing to meet those targets can be a career-ending blunder.

The power cuts could be more disruptive than previous shortages,&nbsp;Bank of America said in a report. Due to shortages in some areas, it said, "a relaxation of the government's energy consumption goals may not immediately alleviate the power crunch.

China is one of the world's biggest emitters of climate-changing industrial gases and consumes more energy per unit of economic output than developed countries. Given its huge population, on a per capita basis it ranks much lower.

China also is preparing for the Winter Olympics in the capital, Beijing, and the nearby city of Shijiazhuang in February, a period when it will want clear blue skies.

Officials in Jiangsu province, a manufacturing hub northwest of Shanghai, told state media some cities there have used up 90 per cent of this year's quota for power use. The officials of the provincial planning agency were cited as saying individual city governments had to decide how to meet their targets.

The government of Guangdong province, China's biggest manufacturing centre, has cited both official energy use limits and low water levels in hydropower reservoirs that provide a big share of its electricity.

In Liaoning province, where Shenyang is the capital, the government said in a statement Sunday that power demand hit a record high in the first eight months of the year. It said Liaoning has suffered shortages since then due to a decline in wind power and other sources.

The government of neighbouring Jilin province blamed a shortage of coal. It said in a statement Monday its governor would visit miners in nearby Inner Mongolia to line up additional supplies.

Some advance warnings of power cuts to residents in Shenyang and other cities cited a need to ration power but didn't say why. 
Li, the noodle restaurant owner, showed a reporter a notice circulated on social media that said power would be out in his neighbourhood from 7:30 am to 4:30 pm. 
Shopkeeper Yang Chang had a generator running on the sidewalk to keep freezers full of meat cold.

As long as there is electricity we can sell things, unlike restaurants that need water, said Yang. Yang didn't know or care what the reason for the power outage was but said, it's understandable. I was born in the '90s. When I was little, electricity wasn't stable,&nbsp;said Yan. Although we are having difficulties, the government will find a solution. 
&nbsp;

People ate breakfast by the light of smartphones and shopkeepers turned on generators as cities across China enforced power cuts Wednesday to meet official conservation targets and ease shortages in some areas.

People ate breakfast by the light of smartphones and shopkeepers turned on generators as cities across China enforced power cuts Wednesday to meet official conservation targets and ease shortages in some areas. News reports blame high coal prices they say make power companies reluctant to meet booming demand, while economists say the real motive is political: Officials are under pressure to curtail energy use to meet official targets. In Shenyang, the northeast's most populous city, restaurant owner Li Yufeng used a battery from an electric bicycle to run a pot for noodles after seeing a notice power would be switched off at 7:30 am. Li said he started work two hours early, at 6 am, to prepare chicken, sauces and other dishes. There are some impacts, but not a big impact, said Li as customers ate by smartphone lights. Factories in China's busiest manufacturing provinces have been ordered to suspend production for up to a week, prompting concern global supplies of smartphones and other goods might be disrupted. Now, urban neighbourhoods are being blacked out, triggering pleas on social media for the government to solve the problem. China's power consumption is growing at almost double its usual rate, while the ruling Communist Party is trying to reduce energy intensity, or the amount used per unit of economic output. The power cuts come as global leaders prepare to attend a UN environmental conference by video link on October 12-13 in the southwestern city of Kunming. That increases pressure on President Xi Jinping's government, as the meeting's host, to show it is sticking to emissions and energy efficiency targets. The cuts are largely driven by energy consumption control measures, with power shortages affecting another few provinces, Lara Dong of IHS Markit said in an e-mail. This is in line with China's decarbonisation ambitions, she said. Watch The Cabinet's planning agency warned in August that 20 regions had exceeded energy use and pollution targets after manufacturing rebounded from the pandemic. The government has ambitious plans to make the economy cleaner and more energy-efficient, so failing to meet those targets can be a career-ending blunder. The power cuts could be more disruptive than previous shortages, Bank of America said in a report. Due to shortages in some areas, it said, "a relaxation of the government's energy consumption goals may not immediately alleviate the power crunch. China is one of the world's biggest emitters of climate-changing industrial gases and consumes more energy per unit of economic output than developed countries. Given its huge population, on a per capita basis it ranks much lower. China also is preparing for the Winter Olympics in the capital, Beijing, and the nearby city of Shijiazhuang in February, a period when it will want clear blue skies. Officials in Jiangsu province, a manufacturing hub northwest of Shanghai, told state media some cities there have used up 90 per cent of this year's quota for power use. The officials of the provincial planning agency were cited as saying individual city governments had to decide how to meet their targets. The government of Guangdong province, China's biggest manufacturing centre, has cited both official energy use limits and low water levels in hydropower reservoirs that provide a big share of its electricity. In Liaoning province, where Shenyang is the capital, the government said in a statement Sunday that power demand hit a record high in the first eight months of the year. It said Liaoning has suffered shortages since then due to a decline in wind power and other sources. The government of neighbouring Jilin province blamed a shortage of coal. It said in a statement Monday its governor would visit miners in nearby Inner Mongolia to line up additional supplies. Some advance warnings of power cuts to residents in Shenyang and other cities cited a need to ration power but didn't say why. Li, the noodle restaurant owner, showed a reporter a notice circulated on social media that said power would be out in his neighbourhood from 7:30 am to 4:30 pm. Shopkeeper Yang Chang had a generator running on the sidewalk to keep freezers full of meat cold. As long as there is electricity we can sell things, unlike restaurants that need water, said Yang. Yang didn't know or care what the reason for the power outage was but said, it's understandable. I was born in the '90s. When I was little, electricity wasn't stable, said Yan. Although we are having difficulties, the government will find a solution.

Electricity crisis: Chinese switch to flashlights, generators to meet emission targets & ease coal shortages

Per capita consumption of electricity is one of the potent indicators of a society&rsquo;s human development index. India&rsquo;s per capita consumption has crossed the landmark 1000 kwph in 2015.&nbsp; Still it lags behind the world average (3126 kwph) and is way behind some of the developed and middle income countries like China (4074 kwph).

Our growing urbanisation and economic growth means we would need a lot more electricity than what is available today. In the year 2015 the peak demand deficit for power stood at 3.5 percent.&nbsp; A cursory glance at the statistics may elicit a response that it&rsquo;s not much. But the narrow gap between demand and supply is due to subdued demand. Once the economic activities pick up pace there would be a yawning gap between demand and supply.&nbsp;

To bridge this gap and keep pace with the rising demand we need a lot of investments in power sector and the central as well as state governments can&rsquo;t shoulder this responsibility alone. They need funds and foreign direct investment is a step in the right direction.&nbsp; &nbsp; &nbsp;

Since the beginning of 21st century the increasing demand of power raised the pitch for opening up the power sector for foreign investments. In 2012 the then UPA (United Progressive Alliance) Government allowed 100 percent FDI in power sector.&nbsp;

Even before the overhaul of the FDI regulations in power sector investments were trickling in. Between the years 2000 and 2015, $9.7 billion was invested in power sector. Ever since the NDA (National Democratic Alliance) Government has come to power the total FDI inflow has been to the tune of $11 billion (in a span of three years).&nbsp;

These are impressive numbers but account for only 3 percent of the entire FDI inflow in the country. Of the 10 sectors mentioned by the Reserve Bank of India (RBI) power sector was at the ninth spot.

The reason for cautious investment trend lies in the challenges posed by the structure and ground realities of the power sector. The biggest challenge is arriving at a competitive tariff structure which is acceptable to both the power producer and the consumer.&nbsp;

Due to lack of clarity in pricing which included absence of long term power purchase agreement (PPA) and weak demand in August 2017 as many as 21 GW (gigawatt) of commissioned private sector coal based power plants were lying idle or operating at sub-optimal levels. &nbsp;

Another peculiarity of the investment pattern is that most of the FDI has come into the generation arm of the power sector. The other two sectors transmission and distribution (which deals with the consumer supply) have seldom benefitted from large scale investments.&nbsp;

While investment in generation is always a priority, in India, equal if not more need is felt in the transmission and distribution sectors. India&rsquo;s Transmission &amp; Distribution Losses (euphemism for theft) stand at staggering 23 percent. This is due to faulty electricity metres, old and dilapidated distribution system and weak out-dated transformers.&nbsp;

To deal with this situation the government in 2008 initiated Restructured&nbsp;Accelerated&nbsp;Power Development&nbsp;and&nbsp;Reforms&nbsp;Programme&nbsp;(R-APDRP). The focus of the program was to bring down AT&amp;C&nbsp;loss, adoption&nbsp;of&nbsp;information&nbsp;technology&nbsp;in&nbsp;energy&nbsp;accounting, consumer care and strengthening distribution network of State Power Utilities.&nbsp;

It is here that the government can benefit from targeted FDI. This is a huge opportunity area as most of the state power utilities are financially weak and also don&rsquo;t have the technical and human resource abilities to upgrade the legacy systems.&nbsp;

&nbsp;Investments in manpower training, smart metering and general improvement of distribution system that brings down the T&amp;D loss from 23 percent to 10 percent or less will phenomenally improve the health of the state power utilities. FDI can be attracted by offering a long term stable profit sharing mechanism to those companies who bring in their technology as well as finances.

Another opportunity lies in the renewable energy space. In the last one decade, away from the eyes of the mainline media, renewable energy has scripted an emphatic story of growth and expansion. Even before committing to Paris Climate Deal, India had fundamentally revised its ambition of expanding installed renewable energy capacity especially solar energy.&nbsp;

Today our target for 2022 has been revised (20000 megawatt under Jawaharlal Nehru National Solar Mission initiated in 2009) to 100000 megawatt. Similarly wind energy goals have been revised and together the installed renewable energy capacity target now stands at 175000 megawatt. &nbsp;&nbsp;

If the government consciously directs FDI in solar and wind sectors as well as in manufacturing of equipments and batteries and storage research segment it would fundamentally alter the energy sector in general and renewable energy sector in particular.&nbsp;

This way India would be able to judiciously utilize the foreign funds and make up for the slow start during the first decade of the 21st century.&nbsp;

Our growing urbanisation and economic growth means we would need a lot more electricity than what is available today.

Per capita consumption of electricity is one of the potent indicators of a society’s human development index. India’s per capita consumption has crossed the landmark 1000 kwph in 2015. Still it lags behind the world average (3126 kwph) and is way behind some of the developed and middle income countries like China (4074 kwph). Our growing urbanisation and economic growth means we would need a lot more electricity than what is available today. In the year 2015 the peak demand deficit for power stood at 3.5 percent. A cursory glance at the statistics may elicit a response that it’s not much. But the narrow gap between demand and supply is due to subdued demand. Once the economic activities pick up pace there would be a yawning gap between demand and supply. To bridge this gap and keep pace with the rising demand we need a lot of investments in power sector and the central as well as state governments can’t shoulder this responsibility alone. They need funds and foreign direct investment is a step in the right direction. Since the beginning of 21st century the increasing demand of power raised the pitch for opening up the power sector for foreign investments. In 2012 the then UPA (United Progressive Alliance) Government allowed 100 percent FDI in power sector. Even before the overhaul of the FDI regulations in power sector investments were trickling in. Between the years 2000 and 2015, $9.7 billion was invested in power sector. Ever since the NDA (National Democratic Alliance) Government has come to power the total FDI inflow has been to the tune of $11 billion (in a span of three years). These are impressive numbers but account for only 3 percent of the entire FDI inflow in the country. Of the 10 sectors mentioned by the Reserve Bank of India (RBI) power sector was at the ninth spot. The reason for cautious investment trend lies in the challenges posed by the structure and ground realities of the power sector. The biggest challenge is arriving at a competitive tariff structure which is acceptable to both the power producer and the consumer. Due to lack of clarity in pricing which included absence of long term power purchase agreement (PPA) and weak demand in August 2017 as many as 21 GW (gigawatt) of commissioned private sector coal based power plants were lying idle or operating at sub-optimal levels. Another peculiarity of the investment pattern is that most of the FDI has come into the generation arm of the power sector. The other two sectors transmission and distribution (which deals with the consumer supply) have seldom benefitted from large scale investments. While investment in generation is always a priority, in India, equal if not more need is felt in the transmission and distribution sectors. India’s Transmission & Distribution Losses (euphemism for theft) stand at staggering 23 percent. This is due to faulty electricity metres, old and dilapidated distribution system and weak out-dated transformers. To deal with this situation the government in 2008 initiated Restructured Accelerated Power Development and Reforms Programme (R-APDRP). The focus of the program was to bring down AT&C loss, adoption of information technology in energy accounting, consumer care and strengthening distribution network of State Power Utilities. It is here that the government can benefit from targeted FDI. This is a huge opportunity area as most of the state power utilities are financially weak and also don’t have the technical and human resource abilities to upgrade the legacy systems. Investments in manpower training, smart metering and general improvement of distribution system that brings down the T&D loss from 23 percent to 10 percent or less will phenomenally improve the health of the state power utilities. FDI can be attracted by offering a long term stable profit sharing mechanism to those companies who bring in their technology as well as finances. Another opportunity lies in the renewable energy space. In the last one decade, away from the eyes of the mainline media, renewable energy has scripted an emphatic story of growth and expansion. Even before committing to Paris Climate Deal, India had fundamentally revised its ambition of expanding installed renewable energy capacity especially solar energy. Today our target for 2022 has been revised (20000 megawatt under Jawaharlal Nehru National Solar Mission initiated in 2009) to 100000 megawatt. Similarly wind energy goals have been revised and together the installed renewable energy capacity target now stands at 175000 megawatt. If the government consciously directs FDI in solar and wind sectors as well as in manufacturing of equipments and batteries and storage research segment it would fundamentally alter the energy sector in general and renewable energy sector in particular. This way India would be able to judiciously utilize the foreign funds and make up for the slow start during the first decade of the 21st century.

FDI in power sector: Focussed approach is the key

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Electricity crisis: Chinese switch to flashlights, generators to meet emission targets & ease coal shortages

FDI in power sector: Focussed approach is the key