National electricity market reforms are gaining pace with the launch of a pilot power trading platform in Auhui, enabling five major power users to buy directly from 18 suppliers.
But the ultimate success of the national scheme rests on State Grid Corp. of China, the conduit through which all electricity is transmitted, People’s Daily reported Thursday, citing industry analysts.
Anhui is following in the footsteps of Guangdong and Yunnan in taking a direct purchase mechanism, which helps lower costs by removing intermediaries.
The National Energy Administration has identified 12 provinces — Jilin, Guangdong, Liaoning, Anhui, Fujian, Jiangsu, Heilongjiang, Hunan, Sichuan, Shanxi, Gansu and Guizhou — to embark on direct purchasing.
But the State Grid is reluctant to facilitate direct purchases by heavy duty users because it would cut its pricing power and hurt profit. Electricity prices have risen by over 30 percent in the 12 years since electricity reforms started, the report said.
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