Burning coal accounts for 70% of output at China's power stations

The country could even reach the point of having too much electricity, because of the large number of new power stations coming online, the paper said.

China, which has been undergoing rapid economic growth, has reported failures to meet power demand since 2000.

It aims for its electricity capacity to rise by 50% by 2010.

They [China] will probably have an over-supply problem very soon, after investing heavily in the power sector in recent years Citigroup economist Yiping Huang

"This marks a turning point in the electricity supply shortfalls of a few years ago," said Zhang Guobao, deputy head of the National Development and Reform Commission, China's main planning body.

Cooling consumption

China's power cuts have been caused by two main factors.

Firstly, the country has not had enough power stations to keep up with recent breakneck economic growth.

Secondly, with 70% of its power stations fuelled by coal, China's overburdened transport system has struggled to deliver all the coal needed by plants to work at full capacity.

With additional power stations now coming online, China plans to have a national electricity capacity of 750 gigawatts by 2010, up from the 500 gigawatts seen at the end of last year.

At the same time, the Chinese government has moved to reduce electricity consumption, seeking to diversify the country's economic focus away from energy-intensive sectors such as heavy industry towards the services and computer sectors.

Green technologies

"They [China] will probably have an over-supply problem very soon, after investing heavily in the power sector in recent years," said Yiping Huang, an economist with Citigroup in Hong Kong.

"So what they'll likely have to do is start rationing new investment [in power plants]."

A Chinese energy official said on Monday that the country was keen to work with other nations on developing new technologies to increase energy efficiency.

Vice Minister of Science and Technology Ma Songde was speaking at a conference on energy cooperation with the European Union, held in Shanghai.

China and the EU were due to sign an agreement which aims to develop technologies to capture carbon dioxide emissions from coal power stations and store them underground.