Documents Released on New Electricity Pricing System
The local government recently released documents on electricity sector reforms that will cover everything from pricing to creating a national electricity futures market. The new system that was piloted in Shenzhen early this year, will expand its coverage to Hubei, Anhui, Guizhou and Yunnan provinces along with Ningxia Hui Autonomous region.
According to the National Energy Administration and National Development and Reform Commission the new pricing system will benefit power users and will set p cost saving mechanism for power grids enterprises and to further promote the marketization of electricity. China will also create an electricity trading bodies that are independent and work on promoting inter provincial trade. This will prompt authorities to look at the possibilities of a unified national electricity futures and derivatives market.
Those considered as power users that meet the requirements for market access will be given direct access to purchase from power generation companies. China will also slowly scrap government controls of on grid prices in several areas that have a mature electricity market while consumers will be the ones to set the price when based on the newly released documents.