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China Reforms Hydro-Electricity Prices

Chinaon Wednesday said it would reform the price that power-grid operators pay to hydropower plants for electricity to encourage investment in the industry.
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Τετ, 22 Ιανουαρίου 2014 - 17:57
China on Wednesday said it would reform the price that power-grid operators pay to hydropower plants for electricity to encourage investment in the industry.

The price reform is likely to mean a rise in the prices paid to hydropower generators to help the country achieve its clean-energy targets.

Chinese officials admitted last month that the country is struggling to meet its 2015 targets for clean-energy production. China wants non-fossil fuels to make up 11.4% of its energy mix by 2015, but consumption reached only 9.4% in 2012.

 China 's National Development and Reform Commission, the nation's top economic planning agency, said prices for hydroelectricity will be based on the average price of electricity that power-grid operators purchase wholesale. The price will also factor in hydropower development costs, it said.

In the past, hydroelectricity prices were regulated by local governments, which set prices based on a formula that also weighed development costs with other factors. That price level, however, was typically lower than the wholesale price of conventional electricity.

The NDRC said Wednesday that the price reform would allow hydroelectricity to "reasonably reflect market rates" and allow "the market to play a more decisive role in the allocation of resources." Similar language was used last year in China 's landmark reform plans for the energy market over the next decade.

 China added 29 gigawatts of hydropower capacity last year, bringing its cumulative capacity to 278 gigawatts, according to the National Energy Administration.
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