China set to roll out flexible electricity pricing

As the China's economy grows, energy demand is soaring. Now, new smart meters are being rolled out in some communities, to allow peak and off-peak pricing. It's hoped the scheme will encourage households to cut down on their energy bills.

Qi Guiqun's family uses electric heating. He finds it saves a lot of money.

"We use around 500 Kilowatt Hours of electricity each month. That only costs us 200 Yuan. It's much cheaper than using the central heating which will cost us over two thousand Yuan for four months." Qi Guiqun said.

In the past, houses in Qi's neighborhood had a normal, fixed-tariff meter. At peak times, there would often be power cuts.

Now, the local electricity company has installed "smart meters".

Power supply has become more reliable and more importantly, the charges vary according to the time of day.

"At peak times, between 8am and 10pm, the tariff is half a Yuan per Kilowatt Hour. At night time, it drops to a quarter of a Yuan. We save a lot if we use the air conditioning during the night." Qi Guiqun said.

The pilot scheme that Qi's family has joined is called the "Peak-valley pricing project". It is a voluntary scheme initiated by the National Development and Reform Commission. It's aimed at reducing peak power demand and keeping residential power prices steady.

"We've sent out promo material to let more people know about this scheme. Signing up is voluntary and we provide the smart meters for free." Zhao Qi, Shijiazhuang Power Company said.

Of the 700 homes in Qi's neighborhood, over 500 have already signed up. And they're just one of 8 neighborhoods in Shijiazhuang city who are all taking part.

The National Development and Reform Commission says all provinces must offer voluntary flexible pricing schemes by 2015.

It's a positive attempt to promote this Peak-valley pricing policy. Yes, it's still in its initial stages. But if it succeeds, it could change people's habits of electricity usage. And that would make energy consumption more efficient.