20 June 2011 Last updated at 01:58 ET

Shanghai to ration electricity due to power shortage

By Chris Hogg BBC News, Shanghai

China has been coping with power shortages since March, because of coal supply problems and drought

Offices and shopping malls in the Chinese city of Shanghai will be urged to close their doors on the hottest days of the year this summer.

The power rationing is necessary due to the country's shortage of electricity.

The electricity grid serving China's financial hub does not have the capacity to meet peak demand the authorities say.

China has been coping with power shortages since March, because of coal supply problems and a drought.

When the mercury in the thermometer hits 37C (98.5F) - not that unusual in summer here in Shanghai - power rationing will get under way.

Some 24,000 businesses - mainly factories and other industrial plants - will face mandatory power cuts.

But this year, in what the Chinese newspapers are describing as an unprecedented move, 3,000 non-industrial businesses - mainly shopping malls and office blocks - will be asked to close their doors too.

When power is running out, households are the priority for the authorities here.

The shops and offices will not be forced to close but they will be encouraged to do so.

So far the reaction from those likely to be affected has not been that positive.

The problem is that coal prices surged earlier in the year, making generating electricity less profitable.

About 80% of the power produced for the electricity grid in China comes from coal-fired power stations.

A drought here has also cut the amount of power available from hydro-electric facilities as water levels in reservoirs have fallen.

The heavy rain of recent days that has caused severe flooding in some parts of the country is reported to have restored water levels at some of those plants, easing the situation somewhat but not solving the problem.

It is thought likely there will be power shortages in at least 10 provinces as demand surges on the hottest days this summer.