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China to adopt graduated power rates to spur energy saving
By Richard Fu |
October 9, 2010, Saturday
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Online Edition
Online Edition
CHINA is to introduce graduated tariffs for residential-use power as part of the nation's effort to reform energy prices.
Based on volume, the graduated structure will penalize users of excessive power with higher rates but keep power bills basically unchanged for most of the households nationwide.
"To adopt a graduated power tariff policy for residents has become a key measure for many countries short of energy to address highflying energy prices and curb irrational energy consumption," the National Development and Reform Commission said today.
Residential tariffs are typically 1.5 to 2 times those of industrial-use power in foreign nations because delivering power to households -- at the end of the grid and with low voltage level -- is the costliest, the NDRC said. In China, residential power is cheaper thanks to government subsidies.
A graduated mechanism will improve China's power tariff structure and spur energy conservation, the top planning agency said. The additional charges will be used to cover higher power purchase costs for grid companies and for upgrading residential watt-hour meters.
The government decided to divide residential power tariffs into three categories: for basic needs, for normal and reasonable demand, and for needs to pursue high living quality. It released two proposals today to solicit public opinions.
In the first proposal, the basic-needs category will be the average monthly use of 70 percent of local households that consume the least power in a province or municipality, with no changes on tariffs.
In the second proposal, the basic-needs category will be the average use of 80 percent of local residents, and the price will increase by around 0.01 yuan per kilowatt hour from the current level.
The second category will be the average use of 90 percent or 95 percent of households in the two proposals, with tariffs to be hiked by 0.05 yuan per kWh to levels that power companies can break even or make reasonable profit. Tariffs in the third category, or for high living quality needs, will go up at least 0.2 yuan per kWh to reflect the scarcity of resources and compensate the environment.
By comparison, the residential power tariff is 0.617 yuan a kWh in Shanghai and that halves during night time. Rates vary among provinces.
Provincial and municipal governments will later work out their detailed plans on the graduated system, which has already been introduced on a trial basis in Zhejiang, Fujian and Sichuan.
Based on the nationwide average in 2009, 110 kWh can meet the demand of 70 percent of households per month, 140 kWh for 80 percent, and 270 kWh for 95 percent. That means a household consuming 300 kWh a month will pay 23 yuan more in power bill under proposal one and 13.9 yuan more under proposal two.
Based on volume, the graduated structure will penalize users of excessive power with higher rates but keep power bills basically unchanged for most of the households nationwide.
"To adopt a graduated power tariff policy for residents has become a key measure for many countries short of energy to address highflying energy prices and curb irrational energy consumption," the National Development and Reform Commission said today.
Residential tariffs are typically 1.5 to 2 times those of industrial-use power in foreign nations because delivering power to households -- at the end of the grid and with low voltage level -- is the costliest, the NDRC said. In China, residential power is cheaper thanks to government subsidies.
A graduated mechanism will improve China's power tariff structure and spur energy conservation, the top planning agency said. The additional charges will be used to cover higher power purchase costs for grid companies and for upgrading residential watt-hour meters.
The government decided to divide residential power tariffs into three categories: for basic needs, for normal and reasonable demand, and for needs to pursue high living quality. It released two proposals today to solicit public opinions.
In the first proposal, the basic-needs category will be the average monthly use of 70 percent of local households that consume the least power in a province or municipality, with no changes on tariffs.
In the second proposal, the basic-needs category will be the average use of 80 percent of local residents, and the price will increase by around 0.01 yuan per kilowatt hour from the current level.
The second category will be the average use of 90 percent or 95 percent of households in the two proposals, with tariffs to be hiked by 0.05 yuan per kWh to levels that power companies can break even or make reasonable profit. Tariffs in the third category, or for high living quality needs, will go up at least 0.2 yuan per kWh to reflect the scarcity of resources and compensate the environment.
By comparison, the residential power tariff is 0.617 yuan a kWh in Shanghai and that halves during night time. Rates vary among provinces.
Provincial and municipal governments will later work out their detailed plans on the graduated system, which has already been introduced on a trial basis in Zhejiang, Fujian and Sichuan.
Based on the nationwide average in 2009, 110 kWh can meet the demand of 70 percent of households per month, 140 kWh for 80 percent, and 270 kWh for 95 percent. That means a household consuming 300 kWh a month will pay 23 yuan more in power bill under proposal one and 13.9 yuan more under proposal two.
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