Guangzhou will spend 200 million yuan (US$24.6m) to encourage small power plants to fill the gap in electricity supply shortages in the early half of this year, Mayor Zhang Guangning told a news briefing Saturday (March 25).

Supply would improve in the latter half, he said, when more than 6 million kilowatts of new capacity in Guangdong Province is expected to come online.

Peak demand last year was 1.35 million kilowatt hours (kWh). Small producers were unwilling to step in because of the high fuel cost to run generators, so the government offered them subsidies. The city itself produces a fifth of the electricity needed, and the rest is supplied by the Southern Power Grid.

"Last year we offered 200 million yuan in subsidies. This year we have prepared another 200 million yuan to subsidize small producers in the first six months," the mayor said.

He estimates the peak demand to be between 1.35 million kWh and 1.4 million kWh.

The distribution network was also inadequate to meet the supply and needed to be upgraded.

Zhang said the city government has increased investment in power distribution facilities. "We spent 2.3 billion yuan last year and will spend 3.8 billion yuan this year."

As to a hotly debated ban on minivehicles with an exhaust volume lower than 1000cc, he said more details need to be considered before the ban could be dropped.

The mayor also promised to invest more money in education and health facilities.

More than 12.3 billion yuan was spent on education last year, he said. The city's University Town will be able to accomodate between 150,000 and 200,000 students when it is completed. The government also set a goal to upgrade rural school facilities in the next three years.

Guangzhou will spend 300 million yuan this year to subsidize poor urban residents in Medicare and guarantee that 80 percent of rural residents have medical insurance.

Editor: Yan