Higher electricity pricing as deterrence

Source: Xinhua | 2017-01-04

CHINA has toughened its tiered electricity pricing to deter outdated steel producers and advance capacity cuts, the top economic planner said yesterday.

The measure, effective since Sunday, will raise the extra price paid by “outdated” steelmakers by 66.7 percent to 0.5 yuan (7 US cents) per kilowatt-hour, according to the website of the National Development and Reform Commission. Outdated steelmakers are those set to be phased out

Producers that have not met capacity-cut goals on time face the same penalty as those to be phased out, while those in the “restricted” category will continue to face an extra 0.1 yuan per kWh of electricity.

Local authorities are allowed to expand the price gap even further, the NDRC said.

Since 2004, the NDRC has implemented a three-tier pricing system for eight major energy-intensive industries.