Bloomberg quoted the China Electricity Council said China electricity demand growth may slow to about 5% in the second half from the first amid curbs on energy-intensive and polluting industries, cutting investment in power plants.

The council said in a statement that electricity consumption may rise about 12% to 4.1 trillion kilowatt-hours this year. Demand gained 22% in the first six months on increased factory use. Economic growth eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, restraining energy demand growth. Chinese investment in power stations and grids will reach about CNY 660 billion this year less than 2009.

The state backed council said second-half power supply and demand will be balanced generally with surplus in some regions and tightness in others, depending on coal supply and weather conditions. China uses coal as fuel in about 80% of its power plants.

The council said power-station coal prices may stabilize at high levels in the second half on constrained supply. The government should improve the system linking coal and electricity prices to help stem losses at power producers.

(Sourced from Bloomberg)