Tiered rate plan fails to reduce electricity usage

PUBLISHED : Friday, 06 April, 2007, 12:00am
UPDATED : Friday, 06 April, 2007, 12:00am

The mainland has failed to use discriminatory electricity tariffs to restrict usage by high-energy-consuming enterprises in some regions, the nation's electricity watchdog said yesterday.

A tiered electricity pricing policy introduced in 2004 had not been applied in some places, a State Electricity Regulatory Commission report said. This had added to uncertainty over whether the country would meet its goal of cutting energy consumption for each unit of GDP by 20 per cent in the five years to 2010, the report said.

The system was introduced to curb unrestrained expansion in eight high-energy-consumption sectors, including production of electrolytic aluminium, cement and iron and steel.

Plants in these sectors were classified into one of four power tariff groups based on their technology, production processes and energy consumption.

Those at the low-tech, high-power consumption end of the spectrum, which the government wants to phase out, have had to pay 15 fen per kilowatt-hour more than ordinary plants since January. 'Restricted' plants with relatively better technology faced a smaller increase of four fen per kilowatt-hour. The tariffs are expected to rise further next year.

Wang Yeping, the watchdog's vice-chairman, cited loose government oversight as among the reasons for the system's failure in some areas.

He did not say what measures it would adopt to improve the situation. 'In some underdeveloped regions, electricity supply is relatively sufficient. The development of high-energy-consumption enterprises is not effectively reined in,' Mr Wang said.

'Some enterprises have their own power plants. These small plants use more coal and are bigger polluters. Since they use electricity that they themselves supply, they can dodge the additional charge.'

The official also said the policy failed to discourage enterprises whose products sold well because their businesses generated enough income to offset the additional cost.