Chalco Said to Be First to Benefit from Direct Electricity Supply

BEIJING, July 8 -- China's top aluminum producer Chalco is said to have reached an agreement to buy electricity directly from the State Grid and now is waiting for local governments' approval, according to a report by Xinhua-run China Securities Journal.

    But Chalco hasn't confirmed this yet.

    The report said that Chalco and the State Grid have already fixed the on-grid electricity price at 0.03-0.06 yuan/kwh, far lower than Chalco's current electricity cost of about 0.15 yuan/kwh.

    Once Chalco is successful in participating in the direct power supply program, its aluminum plants with self-owned power plants will firstly promote the program.

    China's State Electricity Regulatory Commission (SERC) announced on June 30 that electricity users with voltage of 110 kilovolts and above are now permitted to purchase electricity directly from thermal power enterprises with unit capacity of at least 300,000 kilowatts, or from hydropower plants with unit capacity of at least 100,000 kilowatts.

    SERC also said that under the pilot program, electricity prices may fall 10-20 percent from their current average level for indirect supply from power grids.

    Analysts point out that large aluminum producers will benefit most from the program as their power consumption voltage is typically at 110 kilovolts or above.

    However, more than 60 percent of the domestic aluminum enterprises are not qualified to join in the program because most of their aluminum projects fail to get green light from the regulator.

    (Source: chinamining.org)