12 Oct 2021
China to Liberalise Pricing for Coal-Generated Energy
The Index Today
In an announcement made by Chinese National Development and Reform Commission NDRC on Tuesday, pricing will become more liberised for coal-generated electricity through market trading.
No timeframe has been specified by the NDRC, but all industrial and commercial users will be required to buy from the market or through agents “as soon as possible.” This means a surge of users up from 44% to 70% may be seen. On the other hand, current buyers are paying at a fixed rate.
The new initiates have been put in place to manage the ongoing energy crisis which has negatively impacted the nation’s economic growth. According to analysts, a 12% cut in industrial power consumption has been forecasted for the quarter, mainly as a result of coal shortage.
NRDC Official Peng Shaozong said, “The pricing reform is designed to reflect power demand and consumption, and to some extent to ease operation difficulties of power firms and encourage plants to increase power supply.”
To prevent high energy consumption in the state, the new pricing strategy will mean coal-generated power will be allowed to fluctuate up to 20% from its initial base levels. This will not affect the CPI or other economic indicators.