(Yicai Global) Sept. 27 -- Households and businesses in some cities in northeastern China are already experiencing power rationing due to tight coal supply and other factors. The blackouts are due to increase in the coming months as winter approaches and electricity demand surges, industry insiders told Yicai Global.

The power cuts are due to insufficient supply, the insiders said. As temperatures drop in the chilly northeast, residents have started to turn up the heating, driving up electricity usage. A rebound in the economy has also led to businesses and factories consuming more power.

There will be power outages from now until March next year and there will be no advance warning, a Jilin province utility firm said on Sept. 26. There will also be water shortages, it added. Shenyang in neighboring Liaoning province started introducing power cuts on Sept. 23. There has been traffic chaos in some areas as the traffic lights stopped working, according to netizens.

“Power cuts are to protect the grid, otherwise an excessive load will cause equipment to break down and could even lead to fires and other disasters,” a State Grid employee told Yicai Global.

A shortage of coal has led to prices jumping to more than CNY1,000 (USD154.64) per ton and power plants are losing money, said Sun Liping, a researcher from Hainan Green Finance Research Institute. The cost to generate a kilowatt hour of electricity is now almost CNY0.60 (USD0.09), but the base tariff is just over CNY0.40 per kWh.

“Our plant is still running at high capacity but has applied to close down to save coal,” a manager told Yicai Global. Winter is just around the corner and many thermal power plants have halted production to save coal for the peak period.

Editor: Kim Taylor