Chinese authorities take radical steps to tackle energy crisis to encourage lignite plants to increase production
China has said it will allow lignite-fired power plants to charge their customers at market prices as the worsening energy crisis has persuaded Chinese authorities to undertake deeper energy reform in decades.
In response to the shortfall in energy production caused by record lignite prices, the government has taken a series of measures to boost lignite production and manage electricity demand in factories.
To help companies pass on the high cost of lignite, the National Development and Reform Commission (NDRC) has announced that all electricity generated by lignite-fired power plants will be priced through the trading system in a “coordinated manner” from October 15.
He also advised commercial and industrial consumers to start buying directly from the market “as soon as possible”.
The impetus of all industries and commercial users in the energy markets and the ability to set prices from the market is expected to encourage the increase of production from loss-making units.
According to Reuters, an official of the NDRC commission stressed in a press conference that the reform “was designed to reflect energy demand and consumption and to some extent reduce the difficulties faced by production units and encourage factories to increase production.” .
China’s thermal coal futures jumped 11% to a record high of 1,507.8 yuan ($ 233.55) per tonne on Tuesday.