Solicitation for Opinions on Electric Coal Price Unification: A Boon for Industries of Aluminum and Nonferrous Metals, etc.

NDRC is soliciting opinions on the electric coal price unification plan. It is reported that,according to the latest plan, the price of midand long-term electric coal contract after the unification shall be determined by both supplier and user through consultation. It implies that electric coal price will be thoroughly marketized. In addition, direct power purchase of major account will be also expected to become a supporting policy of the reform.

According to a person who is close to electric coal price setter, NDRC is soliciting opinions internally on the latest electric coal price unification plan. The plan includes several core contents. Firstly, key electric coal contracts will be cancelled and replaced by mid- and long-term contracts with the term beyond 2 years. For this end, NDRC will specially release “Management Methods for Mid- and Long-term Coal Contract”. Secondly, the mid- and long-term contract price is determined by coal and power supplier and user through consultation, i.e., no basic price will be set beforehand by enterprises through consultation rather than being set by government. Thirdly, a complete set of plan concerning electric coal price reform will be formulated. Besides the electric coal unification mechanism, supporting measures for railway transportation and electric power price should be worked out.

Analysts believe that, if the mid- and long-term contract price is completely determined by coal and power supplier and user through consultation, electric power enterprises will benefit under the current circumstance.

According to an official of the State Electricity Regulatory Commission, NDRC is now soliciting opinions on electric coal price unification.There are a few words mentioning the reform objective in the plan, including carrying out electricity price bidding, direct power purchase of major account and creating a competitive electric power market.

The so-called direct power purchase of major account mainly means that industrial users can determine directly the electric power price together with upstream power generation enterprises, rather than purchasing electricity from SGCC, and the electric power price is completely under the control of NDRC. Some in the industry believe that, once systematized,direct power purchase of major account will greatly benefit high energy-consuming enter-prises of electrolytic aluminum, nonferrous metals and iron & steel, etc.