China's large-scale power shortages of 2004 and 2011 after the electricity market reforms of 2002: Explanations and differences

Since the electricity market reforms of 2002, two large-scale power shortages, one occurring in 2004 and one in 2011, exerted a tremendous impact on the economic development of China and also gave rise to a fierce discussion regarding electricity system reforms. In this paper, the background and the influence scale of the two power shortages are described. Second, reasons for these two large-scale power shortages are analyzed from the perspectives of power generation, power consumption and coordination of power sources and grid network construction investments. Characteristics of these two large-scale power shortages are then summarized by comparatively analyzing the performance and the formation of the reasons behind these two large-scale power shortages. Finally, some effective measures that take into account the current status of electricity market reforms in China are suggested. This paper concludes that to eliminate power shortages in China, both the supply and the demand should be considered, and these considerations should be accompanied by supervisory policies and incentive mechanisms. (C) 2013 Elsevier Ltd. All rights reserved.