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Electricity Prices Increase Following Recent Power Cuts

Since August, over 20 provinces in China have issued notices to limit electricity usage. This has caused blackouts in certain regions. The power plants are faced with increased electricity demand while there is a coal shortage and thus coal prices are higher. They are operating at a loss because the electricity price is set according to State Council guidelines.

Starting in July, over eight provinces have increased the price of electricity, but they are still within the 10 percent ceiling previously required by the State Council. Several provinces introduced peak demand pricing to normalize the usage. Currently the electricity price increase is aimed at business electricity consumption rather than at residential use.

On September 29, the National Development and Reform Commission issued a notice calling for increased coal production while enabling the coal power plants to set a price that is market driven and reflects the changes in demand and cost.

The central authorities said it is expected that this wave of price increases will continue to expand.

Source: Central News Agency, October 1, 2021