Economic planner says it's part of effort to marketize prices
China is planning to set up two regional power trading exchanges as part of the effort to free up electricity prices, now set by the government, an official said on Thursday.
China's top economic planning agency, the National Development and Reform Commission (NDRC), is currently in talks with power firms and the country's two State grid firms to set up the exchanges in Beijing and Guangzhou, South China's Guangdong Province.
"We are studying matters related to launching power trading centers in Beijing and Guangzhou, and there are also studies into setting up other provincial-level trading organizations," an NDRC spokesman, Shi Zihai, told reporters.
He gave no details.
China aims to break the power sales monopoly held by the two State grid firms, the State Grid Corp of China and the Southern Grid Corp. It has already launched pilot reform programs in seven provinces that allow generators to reach sales agreements directly with consumers.
The Southern Grid manages power transmission and distribution in five southern regions. The State Grid is responsible for the rest of the country.
Shi said the government was drawing up further plans to free up the power market in pilot regions, which include the hydropower-rich Southwest China's Yunnan and Guizhou provinces as well as North China's Inner Mongolia Autonomous Region and Ningxia Hui Autonomous Region in the coal-producing Northwest China.
He said six new policy plans, to be released soon, would establish rules for power transmission and distribution, setting power prices and organizing and operating the new exchanges.
China's power industry is in the doldrums as a result of waning industrial growth. Power output fell 0.1 percent in the first 10 months of the year, according to the National Bureau of Statistics.
With demand weak and new capacity still coming online, power supplies were expected to remain in surplus for the next two to three years, the China Electricity Council said in a report issued in late October.
Separately, the NDRC approved 237 fixed-assets investment projects with total investment reaching 1.89 trillion yuan ($298 billion) in the first 10 months of this year, according to Shi.
The amount represented 4.25 percent of the country's total fixed-assets investment in the same period.
In October, the NDRC approved 19 projects with an investment of 86.4 billion yuan, covering the water conservancy, transportation, technology and energy sectors. Those projects will help coordinate regional development, save water and improve the quality of life, Shi said.
