China raises price of electricity for non-residential use

The Chinese government has raised the price of electricity for non-residential use by an average of 2.8 fen, or 0.4 U.S. cents, per kilowatt hour as of Friday. Experts say the small price hike will cause limited cost increases for productive enterprises. But at the same time, they say the price increase indicates that the country has become more aware of promoting energy conservation and resource efficiency. Wu Jia has more details.

Reporter:

Zhou Dadi, an energy expert, says the impact of the government's recent electricity price hike on manufacturers will be limited.

"This year the country's producer price index saw continuous negative growth, so this round of electricity price increases will not have much impact on productive enterprises. But for ones in high power-consumption industries, their costs will see an evident rise."

Nevertheless, Zhou says the move may help to make up some of the financial losses of the country's electricity grid operators.

The State Grid Corporation of China and China Southern Power Grid, the country's two leading power grid operators, lost a total of 16 billion yuan, or 2.3 billion U.S. dollars, during the first eight months of the year.

What's more, residential electricity prices are not being increased this time.

But officials with the National Development and Reform Commission, the country's top economic planning agency, say residential electricity prices will be charged on a progressive basis in the future. This means that the government will base prices on the amount of electricity that consumers use.

Zhou Dadi hails the move, but says it will not be easy to implement.

"I think it is a good move. On the one hand, it would guarantee low income families' interests and satisfy the general public's basic power-use need. On the other hand, it shows a sort of fairness, and, it would encourage energy conservation. But I'm afraid it's not easy to implement since situations in different areas are not the same. We need more discussions and research."

The country's top economic planning agency also says the government will increase subsidies for renewable energy power operators.

Zhou says China should employ a more scientific manner in developing renewable energy sources.

"Now the cost is comparatively high to use renewable energies to generate electricity. The cost would rise if we would maintain the sustainable generation if renewable energies are put into mass use. We should develop renewable energy in a more scientific way and make it in line with our current economic situation and then (we could) realize a decrease in the cost."

Government data indicate that China's power consumption in October rose nearly 16 percent year on year to 300 billion kilowatt hours, up for the fifth consecutive month since June.

Wu Jia, CRI news.