Nov 30, 2011
Translated by Zhu Na

According to a report in today's China Securities Journal citing unnamed sources working in China's power industry, an announcement related to an increase in China's electricity prices is imminent.

According to these sources, the on-grid power price is expected to increase by around 2.5 fen per kwh, and unlike earlier adjustments to power prices, this increase might be implemented nationwide and will include electricity provided to households.

In April, the National Development and Reform Commission (NDRC) raised the price at which power generation companies in some regions could sell the electricity they produced. In June the NDRC also raised power price for non-residential use in 15 provinces and cities.

Despite these rencent price increases, many power producers are still facing serious financial problems and have difficulty making any profits.

Recently, some power producing companies based in Shanxi province collectively petitioned the central government to lift electricity prices.

The main reason why some are pushing for an increase in power prices is that the coal-fired power producers are having difficulties operating at a profit.

According to data from the National  Bureau of Statistics, the thermal power industry witnessed negative growth for every month this year, from January to September they earned a total profit of 10.4 billion yuan, down 50 percent when compared with the same period last year. In the third quarter of 2011, the industry made only 170 million yuan in profits, down 58 percent on the same period of last year.

The China Electricity Council (中国电力企业联合会), a government-backed industry group that represent all of China's power enterprises and institutions, predicts that power shortages for this winter and next spring could be as much as 30 to 40 million kilowatt.

Analysts also point out that inflation is predicted to ease again in November, which provides policy makers with more flexibility when it comes to lifting power prices.

Links and Sources
China Securities Journal: 电价上调窗口期临近 预计每千瓦时涨2.5分