Demand for Power Falls Short of Forecasts

National power consumption grew 2.3 percent last year compared with 2006, Unified Energy System said Friday, but the figure fell short of the state's long-term forecast of about 5 percent annual growth.

UES said in a statement the lower-than-expected growth was a result of unusually warm temperatures in much of Russia last winter.

"It was almost 9 degrees higher than the long-term norm," UES said.

UES is in the process of selling off all its assets, including 20 major power generating companies, as part of a sweeping reform of the sector.

One of its main arguments in luring investors to these companies has been high demand growth, which reached 4.2 percent in 2006, a year that saw record low winter temperatures and spikes in electricity consumption.

The cold weather has not returned since then, however, causing many analysts to question whether UES' expansion plans and investment needs were justified. The former monopoly wants to see 70 gigawatts of new generating capacity installed in the next few years to stave off what it calls a critical shortage of power. Even without cold weather, its officials say demand would remain high due to the growth of energy-intensive industries.