BEIJING, Sept 6 China has approved new plans for
the development of regional power markets as part of moves to
take power pricing away from the control of state-owned
monopolies and deliver cheaper and greener power.
China's central government on Tuesday approved five regional
reform plans, including a proposal by Beijing to run a regional
trading platform that would focus on boosting the supply of
renewable power, the National Development and Reform
Commission(NDRC) said on Tuesday.
A similar trading plan was also approved for northwest Gansu
province, which is one of China's windiest regions but is
limited in selling its renewable power elsewhere by insufficient
Gansu wants to set up a limited trading platform next year,
which would be scaled up after 2018 to include all industrial
and commercial power users, allowing them to trade through
bilateral contracts with licensed power companies.
China wants to cut company spending on power by 165 billion
yuan ($24.7 billion) over the next two years, the NDRC said in
June. It has launched pilot wholesale trading programs in nearly
20 provinces since last year to increase market transparency and
The country also now has nearly 600 licensed wholesale
agents, who broker power trade agreements between suppliers and
big industrial buyers, the Economic Information Daily reported
Easing the grip of the grid companies, however, may prove
difficult. Three of the 27 regional power trading platforms set
up so far are by subsidiaries of the State Grid Corporation of
China, the country's largest grid operator, the
Economic Information Daily said.
Three provinces - Fujian, Hainan and Heilongjiang - also won
approval for plans to set minimum entrance thresholds for power
companies and wholesale agents seeking access to wholesale
trading schemes to ensure the integrity of the market, the NDRC
State-owned power companies such as China Huadian
Corp and China Huaneng group have set up
wholesale subsidiaries to position themselves in the market,
which is estimated at 1.4 trillion yuan ($210 billion) by 2020.
($1 = 6.6804 Chinese yuan renminbi)
(Reporting By Kathy Chen)