China’s State Electricity Regulatory Commission has warned that tight coal supplies and a drop in hydroelectric power could result in a power shortfall of 26 GW in the coming months.

And the situation could be compounded by a drop in diesel stocks. Today a report from the country’s major oil companies revealed that commercial stocks of diesel fell 12.7 per cent last month.

Last winter, power cuts prompted a rise in the use of diesel-generated power, a situation Beijing is warning could happen again.

Some regions of the country have suffered severe droughts this year, causing a drop in hydropower capacity of up to 40 per cent.

Tan Rongyao, a spokesman for the State Electricity Regulatory Commission, told Xinhua News Agency that the main solution to power shortages was to push forward power price reform, raise grid feed-in power prices for coal-fired power plants in some regions and charge higher prices on energy-intensive users.