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China to begin operating regional northeastern power grid from Jan 15

BEIJING, Jan 08, 2004 (AFX-Asia via COMTEX) China will begin operating its regional northeastern power grid on a trial base from Jan 15, to test the feasibility of the project and to pave the way for final implementation of reforms, the country's electricity industry regulator said.

In a statement, the State Electricity Regulatory Commission said the reforms are aimed at opening part of the power generating market, and to set up a platform for large consumers to directly negotiate with power generating firms, as well as to transmit electricity to northern China.

The northeastern power grid supplies electricity to regions covering 1.2 mln square kilometers, including Liaoning, Jilin and Heilongjiang provinces as well as the cities of Chifeng and Tongliao in Inner Mongolia, serving a population of about 100 mln.

The northeastern power grid's installed capacity totaled 39,400 MW as of the end of 2002, including 5,410 MW of hydropower, accounting for 13.7 pct of the total capacity, and 33,990 MW of coal-fired power, representing 86.3 pct of the total capacity.

The major hydropower generating units will be retained by Northeastern Power Grid Co Ltd with total capacity of 4,282.5 MW, accounting for 11.1 pct of the whole grid's total installed capacity, while China's five major power generating firms will represent 50.35 pct of the total installed capacity, equal to 19,429.5 MW.

The northeastern power grid is China's earliest established transprovincial uniform power grid.

The three northeastern provinces of Liaoning, Jilin and Heilongjiang started a trial reform of supplying electricity through price bids by separating power generators and power grid companies, which has accumulated practical experiences for setting up a regional northeastern power market.

Members of the regional northeastern power market will include the Northeastern Power Grid, the provincial power companies of Liaoning, Jilin and Heilongjiang, as well as power generators with coal-fired generating units with more than 100 MW capacity.

A northeastern electricity distribution trading center will be set up in the Northeastern Power Grid to function as a uniform trading platform in the region.

Three electricity clearance centers will be established at the provincial power companies of Liaoning, Jilin and Heilongjiang to settle electricity charges.

The regional northeastern power market will allow the price of 20 pct of its actual traded electricity to be set by price bids. At the primary stage without technical supporting systems, the electricity price will be decided upon by bids on a monthly basis.

The bottom and ceiling price bidding limits will be set, and the detailed figures will be released after negotiating with the National Development and Reform Commission.

In late 2003, China's State Power Grid Co finished restructuring its five regional grid operations, following the establishment of North China Power Grid Co Ltd in October, according to state media.

Northeastern Power Grid, another regional power grid firm, was officially set up in September.

The other three regional power grid firms are East China Power Grid Co Ltd, Central China Power Grid Co Ltd and Northwest China Power Grid Co Ltd.

Former monopoly State Power Corp was split into five new generating firms and two new distribution companies in a government-led industry shakeup in December 2002.

The generation companies are China Huaneng Group (Huaneng Group), China Datang, China Huadian, China Guodian and China Power Investment (Group). The two distributors are State Power Grid Co and Southern Power Grid Co.

China is facing a severe electricity shortage, with 18 out of 31 Chinese provinces and regions experiencing a power shortage last summer, and the shortage is expected to only ease gradually after 2006.

(1 usd = 8.3 yuan)



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