China would cut on-grid electricity prices by 0.03 yuan per kWh on average by the end of 2015, according to a report by Shanghai Securities News on Monday.
"It's basically set to trim on-grid power prices but it's not decided when and how much on-grid power prices would be adjusted," said a source with one power generation company in south China.
"The anticipated decrease of on-grid electricity prices may result from stark comparison of profitability with coal miners and power generation companies. The government decides to cut on-grid power prices with an eye on balancing interest of various market players," said the anonymous source.
On-grid electricity prices would see maximum drop of 0.05 yuan to 0.07 yuan per kWh with national average decrease of 0.03 yuan per kWh, said another source with a power generation company in east China's Jiangsu province.
The cut of on-grid electricity could take effect as early as November 2015. The cut of on-grid power prices by 0.03 yuan per kWh would bite 126.3 billion yuan of profits from national power generation companies, according to estimate by Lin Xiaotao, an analyst with market information supplier ICIS.
Latest comments