China plans first spot electricity trading as Beijing reforms power market

BEIJING (Reuters) - China will launch its first real-time spot electricity markets in eight regions, the National Energy Administration (NEA) said on Friday, as Beijing accelerates efforts to liberalize power prices currently set by the government.

In a draft rule, the NEA outlined guidelines for eight regions to set up real-time trading platforms that will set prices for the cash market as well as those for a day ahead, allowing power generators, industrial users and distributors to trade power in real time.

The eight regions are Guangdong, western Inner Mongolia, Zhejiang, Shanxi, Shandong, Fujian, Sichuan and Gansu. Their power generation in 2017 was 2.6 trillion kilowatt-hours, 42 percent of China’s total.

The move comes after those regions launched electricity markets last year for monthly and quarterly prices.

China’s major utilities, including China Huadian Corp, China Datang Group, China State Grid Corp and the Three Gorges hydropower producer will be the biggest players in the market, the NEA statement said.

The NEA called for industry feedback by the end of the month but did not give a timeline for the launch. Last August it said it planned to introduce the scheme by the end of 2018.

Reporting by Muyu Xu, Josephine Mason and Meng Meng; Editing by Christian Schmollinger and David Goodman