National Development and Reform Commission: A stricter tiered electricity pricing system for the electrolytic aluminum industry will be implemented.

On September 16, at the National Development and Reform Commission’s press conference for September, Peng Shaozong, Deputy Director-General and First-Class Inspector of the Price Department of the NDRC, stated that, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, since the beginning of this year, the NDRC has accelerated electricity‑price reform by introducing innovative pricing mechanisms for pumped-storage hydropower, issuing policies to enable new‑energy sources to connect to the grid at parity prices, optimizing time‑of‑use tariff structures, and implementing a more stringent tiered electricity‑pricing system for the electrolytic aluminum industry.

On September 16, at the National Development and Reform Commission’s press conference for September, Peng Shaozong, Deputy Director-General and First-Class Inspector of the Price Department of the NDRC, stated that, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, since the beginning of this year, the NDRC has accelerated electricity‑price reforms by introducing an innovative pricing mechanism for pumped-storage hydropower, issuing policies to enable new‑energy sources to connect to the grid at parity prices, optimizing time‑of‑use tariff structures, and implementing a more stringent tiered electricity‑pricing system for the electrolytic aluminum industry. The introduction of these four key reform measures has drawn widespread attention and received positive feedback from all sectors.

 

First, an innovative pricing mechanism for pumped-storage hydropower has been introduced. Specifically, electricity tariffs for pumped-storage generation are determined through competitive bidding, while capacity charges are recovered via transmission and distribution tariffs. At the same time, closer alignment with the development of the electricity market has been strengthened, sending a clear and robust price signal that reassures investors and provides strong impetus for accelerating the expansion of pumped-storage capacity.

 

Second, a policy has been introduced to enable new‑energy projects to achieve grid parity. Starting this year, newly built wind and solar power generation will enter the grid‑parity phase, with coal‑fired power generation benchmark prices applied for the time being. This arrangement will ensure that new projects generate solid returns and will strongly accelerate the development of the new‑energy sector.

 

Third, the time-of-use electricity pricing mechanism will be optimized. In regions where the peak-to-valley load difference exceeds 40%, the ratio of peak‑to‑valley tariffs will, in principle, be no less than 4:1. Moreover, local authorities are required to establish a super‑peak pricing mechanism, imposing an additional 20% surcharge on top of the peak‑hour tariff. This approach will fully leverage the price signal, encouraging electricity consumers to shift demand from peak to off‑peak periods, facilitating the integration of renewable energy, and fostering broader development of energy storage. As a result, it will play a crucial role in ensuring a stable power supply during peak demand and enhancing the overall efficiency of the power system.

 

 

Fourth, a stricter tiered electricity pricing system will be implemented for the electrolytic aluminum industry. By 2025, energy efficiency requirements for the sector will be raised in three phases, and electricity tariffs for enterprises that fail to meet these standards will be progressively increased. This sends a clear signal to the electrolytic aluminum industry—whose annual electricity consumption exceeds 500 billion kWh—while continuously incentivizing companies to improve energy efficiency, boost productivity, and reduce carbon emissions.

 

Going forward, the National Development and Reform Commission will thoroughly implement the CPC Central Committee and the State Council’s strategic plans for peaking carbon emissions and achieving carbon neutrality, and, with a focus on building a new type of power system centered on new energy, continue to deepen electricity pricing reforms. The Action Plan for Deepening Price Mechanism Reform during the 14th Five-Year Plan period, released in the first half of the year, has already laid out a comprehensive framework for electricity pricing reform over the coming period. Recently, the new pricing methodology for transmission tariffs on inter-provincial and inter-regional projects has completed its public consultation process and is set to be issued shortly. In addition, we are accelerating research into measures such as improving the green pricing system, refining the nuclear power pricing mechanism, and deepening reforms of the catalog‑based retail electricity tariff. We will promptly finalize these policies and ensure their effective implementation, further leveraging price signals and market‑based incentives to optimize the allocation of power resources and support the transition toward green and low‑carbon development.

 

 

—— Reprinted from “Henan Nonferrous Metals Brief, Issue 9”