Electricity prices in some regions have been “raised to the maximum allowable level,” and experts say this will help ease the tight electricity supply situation.
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Since the launch of electricity price reform three days ago, Shandong, Jiangsu, and other regions have each organized their first transactions following the deepened market-oriented reform of coal-fired power grid-connected electricity prices. The average transaction price has risen to the maximum allowable level above the benchmark price.
Experts believe that the electricity price reform, which expands the upper limit of market-based electricity prices, will help balance the conflicting interests and demands among various parties in the current power market and alleviate the shortage of electricity supply.
According to an incomplete tally by reporters from the Securities Daily based on official WeChat accounts of local power trading centers, since the launch of the electricity price reform three days ago, Shandong, Jiangsu, and other regions have each organized and conducted their first transactions following the deepening of the market-oriented reform of coal-fired power grid-connected electricity prices. The average transaction price has been “fully capped” at the upper limit of the benchmark price—meaning it does not exceed the maximum allowable increase of 20%.
Experts interviewed by the Securities Daily believe that the electricity price reform has broadened the upward range of market-traded electricity prices, which will help balance the conflicting interests and demands among various parties in the current power market and alleviate the shortage of electricity supply.
Experts also noted that on the first day of electricity price reform, the transaction prices in Jiangsu Province and Shandong Province rose by nearly 20%, reaching the upper limit of the permitted price fluctuation. This was mainly due to two factors: First, Jiangsu Province and Shandong Province are the provinces with the highest thermal power generation capacity in China—excluding the Inner Mongolia Autonomous Region—and also have the largest power deficits, aside from Guangdong Province and Zhejiang Province, placing significant pressure on them to reduce emissions.
Despite having sufficient power supply and even exporting electricity from the Inner Mongolia Autonomous Region, Jiangsu, Shandong, Guangdong, and Zhejiang provinces have the highest demand for externally purchased electricity. Second, the fact that electricity prices were traded at nearly a 20% “maximum allowable increase” indicates strong market demand for electricity in the purchasing provinces and robust economic growth momentum in those regions.
In fact, some regions have already introduced electricity pricing reform plans from August to September. For example, provinces such as Guizhou and Guangdong have successively issued notices implementing time-of-use electricity pricing policies. Based on the standard flat-rate electricity price, these provinces will adjust prices upward or downward by certain percentages, thereby establishing peak-hour and off-peak electricity rates. This approach aims to encourage electricity users to shift their consumption from peak to off-peak periods, ensuring the safe and stable operation of the power system.
In addition, the Zhejiang Provincial Development and Reform Commission will extend the scope of its time-of-use electricity pricing policy to large industrial electricity users (excluding electricity used for electrified railway traction, which is subject to special national regulations). The time-of-use pricing policy will not be adjusted for general commercial and industrial, residential, and agricultural production electricity users this time. Starting from 2024, all general commercial and industrial electricity users will fully adopt the time-of-use pricing system; specific prices and peak-valley time periods will be determined separately.
In some regions, electricity prices, power, reform, price hikes, provinces, users, market, transactions, and time-of-use pricing.
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