China Southern Power Grid has completed the country’s first spot trading of electricity, marking a shift toward market-oriented pricing, reports Yicai Global.
Power prices are currently set by the state. Under the new system, a trading platform matches bids to derive prices based on supply and demand, according to Xinhua. The trial transactions involved 123 power distribution companies, 190 power generators and three major users.
Beijing unveiled plans last year to start spot power trading in western Inner Mongolia and the provinces of Fujian, Gansu, Guangdong, Shandong, Shanxi, Sichuan, and Zhejiang. Most provinces and cities have already introduced a medium-term power market, with annual and monthly cycles, but this is the first time that daily and intra-day spot trading has been conducted.