China will cancel the coal-electricity linkage mechanism from next year

At the executive meeting of the State Council held on January 26, it was decided that the linkage mechanism of coal-fired electricity price should be abolished and the current benchmark price mechanism should be replaced by the market mechanism of "benchmark price + fluctuation".

It means that China will bid farewell to the coal-electricity linkage mechanism which has been implemented for 15 years.

"The core of this deployment is marketization, that is, further strengthening the reform of power system and speeding up the establishment of market-oriented electricity price formation mechanism." Ye Chun, deputy director of China Electric Power Enterprise Development Department, said. In order to solve the contradiction between "market coal" and "planned electricity", China promulgated the policy of coal-electricity linkage at the end of 2004, that is, to adjust electricity price according to the fluctuation of coal price.

In recent years, China has accelerated the reform of the electric power system, transforming the planned transaction of "government pricing" into the market transaction of "negotiated pricing" between the two sides. At present, coal-fired power generation market-oriented trading electricity has accounted for about 50%, electricity prices are significantly lower than the benchmark grid price. Therefore, the coal-electricity linkage mechanism has lost its original significance.

In accordance with the requirements of the meeting, the benchmark price of the new mechanism is determined by the current electricity tariff of coal-fired power generation benchmark poles in various places. The floating range is not more than 10% up and not more than 15% down in principle. Specific electricity prices are determined by power generation enterprises, power selling companies and power users through negotiation or bidding.

In order to reduce enterprise costs, the meeting stressed that electricity prices will not rise for the next year, especially to ensure that the average price of electricity in general industry and Commerce will not rise. Statistics show that in the first half of this year, China's electricity market-oriented transactions reached 1.1 trillion kWh, an increase of 29.3% over the same period last year, accounting for 32.4% of the total social electricity consumption. The average price reduction of direct electricity transaction is 3.4 cents per kilowatt-hour, which reduces the power consumption burden of enterprises by about 30 billion yuan.