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Saturday, 20 June 2009
China May Release Direct Power Sale Rules Soon – Source
The rules will allow approved industrial users to buy electricity directly from power generators and require power transmission firms to clearly lay out their transmission charges.
China May Release Direct Power Sale Rules Soon – Source
The rules will allow approved industrial users to buy electricity directly from power generators and require power transmission firms to clearly lay out their transmission charges.
Li Qiyan 19 June 2009
(Caijing.com.cn) China is expected to launch rules as early as the end of June governing the direct sale of power to industrial users, a person close to the National Development and Reform Commission’s (NDRC) pricing department told Caijing.
Regulations on power transmission fees will also be released by the end of June, the person said.
In a bid to lower costs for struggling energy-intensive industries, particularly electrolytic aluminum plants, the NDRC and the State Electricity Regulatory Commission (SERC) selected 15 plants in March for a direct-sale trial program.
The plants involved in the trial are mostly located in central and western China and include five subsidiaries of Aluminum Corp of China Ltd., Yunnan Aluminium Co. and Shanxi Guanlu Co., as well as eight other producers.
But so far the scheme has run aground due to difficulties in reaching agreement on transmission fees, an official participating in an NDRC-SERC joint price inspection team told Caijing.
Some local governments are also reluctant to support the scheme because of the absence of standardized regulations, the official said.
Under the current pricing system, State Grid Corp. of China and China Southern Power Grid Co., the two state-owned electricity transmission and distribution firms, are obligated to purchase all the electricity generated by power plants at prices set by the National Development and Reform Commission.
The system does not specify the price charged for transmission, allowing grid firms to impose a premium over and above normal transmission costs, defeating the main purpose of direct sales, which is cost savings.
Power plants and industrial users have long appealed for reform of the system and the introduction of direct power sales.
A person participating in the drafting of the new rules told Caijing a market-oriented and negotiation-based mechanism will be introduced.
The rules will allow approved industrial users to buy electricity directly from power generators and require power transmission firms to clearly lay out their transmission charges, the source told Caijing.
Zou Yiqiao, head of the price monitoring section at the SERC told Caijing earlier that the government is studying the possibility of independently setting a transmission price.
An expert from the China Electricity Council, an association of Chinese power enterprises and institutions, also told Caijing earlier that calculating the precise transmission cost is tedious and that grid companies are unwilling to inform users and generators of the real transmission costs.
China’s power consumption in May fell 2.58 percent from a year earlier, according to data from the China Electricity Council. Power consumption in the first five months dropped by 3.66 percent.
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China May Release Direct Power Sale Rules Soon – Source
The rules will allow approved industrial users to buy electricity directly from power generators and require power transmission firms to clearly lay out their transmission charges.
Li Qiyan
19 June 2009
(Caijing.com.cn) China is expected to launch rules as early as the end of June governing the direct sale of power to industrial users, a person close to the National Development and Reform Commission’s (NDRC) pricing department told Caijing.
Regulations on power transmission fees will also be released by the end of June, the person said.
In a bid to lower costs for struggling energy-intensive industries, particularly electrolytic aluminum plants, the NDRC and the State Electricity Regulatory Commission (SERC) selected 15 plants in March for a direct-sale trial program.
The plants involved in the trial are mostly located in central and western China and include five subsidiaries of Aluminum Corp of China Ltd., Yunnan Aluminium Co. and Shanxi Guanlu Co., as well as eight other producers.
But so far the scheme has run aground due to difficulties in reaching agreement on transmission fees, an official participating in an NDRC-SERC joint price inspection team told Caijing.
Some local governments are also reluctant to support the scheme because of the absence of standardized regulations, the official said.
Under the current pricing system, State Grid Corp. of China and China Southern Power Grid Co., the two state-owned electricity transmission and distribution firms, are obligated to purchase all the electricity generated by power plants at prices set by the National Development and Reform Commission.
The system does not specify the price charged for transmission, allowing grid firms to impose a premium over and above normal transmission costs, defeating the main purpose of direct sales, which is cost savings.
Power plants and industrial users have long appealed for reform of the system and the introduction of direct power sales.
A person participating in the drafting of the new rules told Caijing a market-oriented and negotiation-based mechanism will be introduced.
The rules will allow approved industrial users to buy electricity directly from power generators and require power transmission firms to clearly lay out their transmission charges, the source told Caijing.
Zou Yiqiao, head of the price monitoring section at the SERC told Caijing earlier that the government is studying the possibility of independently setting a transmission price.
An expert from the China Electricity Council, an association of Chinese power enterprises and institutions, also told Caijing earlier that calculating the precise transmission cost is tedious and that grid companies are unwilling to inform users and generators of the real transmission costs.
China’s power consumption in May fell 2.58 percent from a year earlier, according to data from the China Electricity Council. Power consumption in the first five months dropped by 3.66 percent.
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