BEIJING (Reuters) - China National Petroleum Corp (CNPC), the country’s biggest state-run energy company, has launched a national power company to buy and sell electricity at lower prices, taking advantage of Beijing’s push to liberalize the country’s power markets.
The new company, China Petroleum Electric Energy Company Ltd (CPEEC) is being established from CNPC’s Daqing Oilfield Electricity Power Group, CNPC said in a statement on Tuesday on its Wechat account.
The Daqing group provides power for oil drilling and refiners at the Daqing oil field, China’s largest, as well as some local commercial and residential households in the northeastern province of Heilongjiang, where the field is located.
CPEEC will primarily source electricity from the wholesale market for CNPC and will also eventually sell power to external customers, said a manager at the Hebei branch of the newly created company.
He said CNPC consumes as much as 60 billion kilowatt hours (kWh) each year. That is equivalent to the amount of power that Qatar and Denmark consumed combined in 2014. He declined to be identified as he is not authorized to talk to the media.
CNPC did not respond to requests for comments on the new unit’s trading plans.
With registered capital of 5 billion yuan ($754.03 million), CPEEC will inherit the existing corporate grid and two coal-fired power plants from Daqing, with annual power generation capacity of 8.6 billion kWh. The company plans to build new natural gas-fired power plants and to deploy distributed energy stations, CNPC said.
CPEEC unifies different regional units that CNPC set up to market power in some provinces that have launched power trading platforms. The National Development and Reform Commission has approved the platforms in 13 provinces and the city of Beijing during the past year. [nL3N1BI2LA] [nL3N1BJ2KQ]
“More regional power selling companies will be launched in the future, probably one in Guangdong province,” said the source.
Heilongjiang’s power market has traded 8.669 billion kWh since it was launched and prices have averaged 0.049 yuan per kWh less than the prices set by the local government, according to data on the provincial government’s website.
In October, CPEEC’s Guangxi branch signed a contract to buy power in the long-term and monthly power markets for CNPC’s Guangxi subsidiary in 2018, CNPC said on its website.
($1 = 6.6357 Chinese yuan renminbi)
Reporting by Muyu Xu and Josephine Mason; Editing by Christian Schmollinger