China improves pricing mechanism for coal-fired power
China's top economic planner on Tuesday announced an improved pricing mechanism for coal-fired power to deepen market-oriented pricing reform in the sector.
The floating range of the market-based electricity transaction prices are adjusted in principle to a range of 20 percent fluctuation in either direction, compared with the current ceiling of 10 percent and floor of 15 percent from the benchmark price, said the National Development and Reform Commission.
The market transaction prices of coal-fired electricity for high energy-consuming enterprises are not restricted by the ceiling of 20 percent upward fluctuation.
All local governments should give priority to the supply of low-cost power for residents and agriculture, said the NDRC.
This will help give full play to the role of the market so that electricity prices can better reflect the supply and demand relationship, as well as the cost changes, said NDRC official Peng Shaozong.
The new rules clarify that the market price of high energy-consuming enterprises is not limited by the 20 percent cap.
This can better transmit the pressure of power generation costs and curb unreasonable power consumption, he noted.
The new rules will also encourage high energy-consuming enterprises to increase investment in technological transformation, improve energy utilization efficiency and promote the transformation and upgrading of the industrial structure, he said.
Electricity consumption for residents and agriculture are not involved in the reforms, so they will retain their electricity pricing methods, he said.