China Faces Power Shortage, Allows Electricity Rate Increase

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Facing a severe power shortage, China has allowed an increase in electricity rates to expand power supply.

According to the People's Daily of China on the 8th, the State Council of China decided at a meeting chaired by Premier Li Keqiang to allow coal-fired power electricity rates to be raised by up to 20% above the baseline. Until now, electricity rate increases were only possible by 10-15% above the baseline.

Chinese experts predicted that the government would raise electricity rates to resolve the power shortage. Guangdong Province has already increased peak-time industrial electricity rates by 25% starting this month. However, the State Council stated that energy-intensive industries would not be subject to the 20% increase cap.

Recently, China has suffered from power shortages from factories to households. The State Council explained that due to a sharp rise in energy prices in the international market, power and coal supply within China have been restricted, affecting normal economic activities and residents' lives. It also added that the pressure on power and coal supply will be significant this winter and next spring.

The State Council requested tax relief benefits and financial support for coal power generation companies to ensure power demand, and ordered an increase in coal mine production. It also urged accelerating the construction of large wind and solar power facilities in the Gobi Desert. However, it stated that uniformly shutting down factories or reducing coal production and usage in a 'campaign-style' manner should be corrected immediately.

This content was produced with the assistance of AI translation services.