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Nationwide electricity market reform expected by 2017

China Daily, March 30, 2016 Adjust font size:

China is expected to roll out national pricing reform of the electricity market by next year, the nation's top economic planner said on Monday.

Pricing reforms were first introduced in 2014 to pilot areas such as Inner Mongolia autonomous region, Shenzhen in Guangdong province, and Anhui, Hubei, Yunnan and Guizhou provinces. Electricity costs in these places have since decreased by an estimated 5.56 billion yuan ($854 million), according to Zhang Manying, an official with the Department of Price Supervision at the National Development and Reform Commission.

With the experience gained from these pilot regions, the reform will now be extended to 12 more provincial power grids and major regional networks this year, including major regions with high electricity demand, such as Beijing, Tianjin, Chongqing and Guangdong.

Zhang said the reform will lessen the monopoly role of power grid companies that have long been able to gain profits from both buying and selling electricity, creating higher electricity costs for companies at a time when the country is facing downward economic pressures.

Under the reform, power grid companies will only be allowed to charge a government-verified service fee according to the costs of transmitting and distributing power.

"Pilot reform of the power sector has played key role in the supply-side reform of the electricity industry, and is intended to promote marketization by allowing more space for market principles to operate," said Shi Zihai, spokesman for the NDRC, adding that the government will also strengthen its regulation of the electricity market.