China’s National Development and Reform Commission (NDRC) has decided to reduce surcharges paid by coal-fired power producers.
This move by China's top economic planner signaled the first increase in wholesale power prices since 2011. The change will take effect from July 1 and will help coal-fired power plants manage their rising coal prices.
The surcharge is paid to provincial governments to cover environmental protection and other programs. Local authorities that resell the power to the national grid will be able to raise prices to offset the lower surcharge revenues. Chinese coal-fired power producers have been complaining about losses since 2016 due to higher coal prices.
