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China Ends Discounted Power Rates for Intensive Users (Update2)
May 14,2010 08:52CST
data analysis

BEIJING, May 14 -- China, the world's second-biggest energy user, stopped selling electricity at discounts to high- consumption companies with immediate effect as part of the government's push to conserve power and resources.

The users affected by the policy change include makers of aluminum and ferroalloy, the National Development and Reform Commission said in a statement on its website today. The government will impose financial penalties on companies whose power consumption exceeds state-set limits, the NDRC said.

Premier Wen Jiabao last week called for greater efforts to cut emissions and save power after energy use per unit of gross domestic product rose in the first quarter. The government will also increase electricity surcharges by as much as twofold for industries including cement, steel and zinc smelting starting June 1, said the NDRC, China's top economic planner.

"This will definitely increase costs for these industries but shouldn't affect power consumption too much," Yi Qiao, a power analyst at UOB-Kay Hian Ltd., said by telephone from Shanghai. "Industrial consumers aren't very flexible on their electricity demand, unlike home users."

The Chinese economy expanded 11.9 percent in the first quarter, the fastest pace in almost three years, spurring power consumption. Energy use per unit of GDP rose 3.2 percent in the period, pressuring the country's conservation targets.

The increase in energy consumption was caused by "rapid growth" in industries including power generation, steel, nonferrous metals, construction materials, petroleum and chemicals, Premier Wen said on May 6.

Some local governments had offered discounts to high energy-consuming companies to boost regional economies after the global slowdown, the NDRC said today.



electric power

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