As winter sets in, China's power shortage has been thrown into spotlight again. This time, the thermal generated electricity industry's financial difficulties have been a major factor in the latest price adjustment.

China last raised electricity prices in June. Since then, profits at coal power companies have continued to drop. Their combined net profits from January to September came in at 10 billion, 50 percent lower from what it was last year. Experts say that raising electricity prices isn’t going to be enough.

Li Caihua, deputy director of Price Department, NDRC, said: “Controlling coal prices should be a prerequisite. If China only adjusts the electricity price without controlling coal prices, it could push both coal price and electricity prices higher. "

Because China’s annual inflation has eased over recent months, some say the timing of the latest hike in power prices is to help power producers. Experts say it won’t have much affect on overal inflation.

Li Caihua said: " The influence on CPI should be very small, we anticipate the impact on CPI for next year should be around 20 basis points."

Some analysts say the price hike will ensure more power supply, and hence more goods can be produced by factories.