October 20, 2017 / 4:30 AM / a year ago

China offers power plants incentives to sign long-term coal supply deals

BEIJING (Reuters) - China’s state planner said on Friday it will allow power plants to send more electricity to the grid if they sign more long-term coal supply contracts with miners in Beijing’s latest move to help calm a red-hot coal market.

FILE PHOTO: A Chinese miner works at a coal mine in the suburb of Tangshan, China's Hebei province December 9, 2005. REUTERS/Jason Lee/File Photo

Long-term supply deals between utilities and coal producers will help calm volatile coal prices, the National Development and Reform Commission (NDRC) said in statement on its website.

Coal prices remain high as utilities look to book winter supplies in the peak demand period for the fuel. The rising prices, increasing safety checks and low domestic production rates have all added to concerns that supply may tighten.

In an internal meeting last week, the NDRC urged utilities to sign long-term purchase contracts with coal producers for next year as early as they can to secure enough supplies for this winter.

Reporting by Meng Meng and Beijing Monitoring Desk; Editing by Kenneth Maxwell

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