China pledges to let the market set energy prices as it moves to import coal and boost gas production amid electricity crisis
- China's economic planning agency said on Wednesday that it would let electricity prices fluctuate "within a reasonable range," according to Reuters.
- The NDRC added that it would boost imports of coal and production of natural gas and ordered railways to prioritize shipments of coal.
- Coal imports have been hampered by a political dispute with Australia, the world's biggest coal exporter, over Canberra's call for an inquiry into the origins of COVID-19.
China's economic planning agency said on Wednesday that it would let electricity prices fluctuate "within a reasonable range" as the country struggles to respond to a raging energy crisis, according to a Reuters report.
The state "shall not intervene in electricity prices from floating within a reasonable range and shall let prices reflect market fundamentals and changes in cost," China's National Development and Reform Commission said in a statement.
The NDRC added that it would boost imports of coal and production of natural gas and ordered railways to prioritize shipments of coal, which accounts for 70% of China's energy production.
Coal imports have been hampered by a political dispute with Australia, the world's biggest coal exporter, over Canberra's call for an inquiry into the origins of COVID-19. China retaliated by banning Australian coal imports, a move that has come back to bite as power curbs sweep the country with winter looming.
Still, as inventories tightened, China in August was able to increase imports by more than a third, albeit from a diminished baseline, according to Reuters.
In its statement, the NDRC said that residential electricity use only makes up 20% of total electricity consumption - and so could be safeguarded from higher prices. Industrial energy limits have usually come before residential ones during previous electricity shortfalls.
Coal futures in China hit an all-time high on Wednesday, after nearly tripling this year.