Jan. 15 (Bloomberg) -- China has shut down more than 6 percent of the power generating capacity in its southern provinces because of a coal shortage, with the region bracing for the worst electricity shortage in at least five years.

Guangxi has shut 2.3 gigawatts, Guizhou 4.2 gigawatts and Yunnan 3.8 gigawatts, Xiao Peng, vice president of China Southern Power Grid Co., said in Beijing today. China's southern provinces have 164 gigawatts of combined capacity, he said.

``The problem is serious,'' Xiao said. ``We have sent an urgent request to the central government to address the issue,'' he said at the China 2008 Economic & Energy Outlook conference.

China burns coal to generate about 78 percent of its electricity. The nation became a net importer of coal for the first time in January last year and consumption has outpaced gains in output from Australia and Indonesia. Rising coal prices and domestic transportation bottlenecks have contributed to a lack of the fuel, Xiao said.

``This is kind of an every-year event due to bad weather, winter heating demand and low output,'' said Donovan Huang, a coal analyst at Nomura Securities Ltd. ``The Chinese New Year is approaching and a lot of the mines have started to shut down as the miners return home.''

China increased coal imports by 34 percent last year to 51 million metric tons as the fastest growth pace of any major economy drove up demand, the Beijing-based Customs General Administration of China said today.

Chinese New Year

The closure of 10.3 gigawatts of power capacity in the three provinces is contributing to the worst power shortage in the region since the distributor was established, Xiao said. China Southern Power was set up in December 2002.

Power shortages in southern China could potentially reach as much as 8 gigawatts, Xiao said. The shortage may ease after the weeklong Chinese New Year holiday in February, before peaking during the summer when consumption increases, he said.

A shortage of fuel oil, burned by power plants, and the government's closure of small-scale coal mines are partly to blame for the shutdowns, he said.

Southern provinces may boost power purchases from the Three Gorges hydro power project in central China and from neighboring Hong Kong to cover demand, Xiao said. Guangdong province, China's manufacturing hub, bought 2 million megawatt- hours of power from Hong Kong in 2007, China Daily said Jan. 11.

Demand Forecasts

China's power demand and supply will be ``generally'' balanced in 2008, Hu Zhaoguang, vice president of Beijing-based State Power Economic Research Institute, said at today's conference in Beijing. The country's central, northeastern and northwestern provinces will have power surplus, while the southern regions will suffer shortages, he said.

The nation's 2008 electricity demand may rise 13.5 percent to 3.7 billion megawatt-hours, Hu told reporters. Total power generating capacity may climb to about 800 gigawatts by the end of this year and 950 gigawatts by 2010, he said.

China's power generation rose 14.44 percent to 3.26 billion megawatt-hours last year, narrowly outpacing the gain in demand, the China Electricity Council said yesterday. The nation's generating capacity rose 14.36 percent to 713.3 gigawatts, it said.

To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net; Ying Lou in Hong Kong at ylou1@bloomberg.net.

Last Updated: January 15, 2008 06:03 EST