Guangzhou - Due to the COVID-19 pandemic, there has been a significant decrease in the number of tourists visiting Sanya, Hainan than in previous years, placing great pressure on local hotel business … with officials of the Atlantis Sanya Resort stating, “We were unable to operate normally during the very bad months of the pandemic and still had to pay the salaries of thousands of employees and utilities every month. It’s been difficult to survive and keep the doors open for business.”
But the pressure to keep businesses in South China open has been greatly alleviated thanks to a national “phased electricity price reduction” policy in which China Southern Power Grid has not only reduced its electricity fees by 1.5 million yuan but also allowed the electricity giant to make arrangements for the postponement and restructuring of payments until June 30 – thus exempting millions of customers from overdue fines.
In the first half of Year 2020, CSG carried out its solemn duty as a market leader, based on the new policy of the CPC Central Committee and the State Council, to support two-part electricity pricing and reduced industrial and commercial electricity prices by 5%.
By June 30, China Southern Power Grid had reduced electricity fees by 9.2 billion yuan for users in its five southern provinces of China, benefiting 7.99 million enterprises, which in turn has significantly enterprises - large and small - to resume their work while concurrently promoting important economic and social development.
As a world-class manufacturing base and the largest economic province in China, Guangdong was severely impacted by this pandemic. Therefore, the implementation of this new policy by CSG to reduce electricity prices in Guangdong was a welcome relief and timely benefit for millions of customers.
From February through June, China Southern Power Grid reduced the electricity fees for Guangdong users by approximately 6.6 billion yuan, which served as a direct benefit to more than 4.8 million business and leisure consumers. As an central state-owned enterprise, CSG also offered timely measures to support enterprises, including continuing to provide power supplies to defaulting customers and exempting them from liquidation damages, which in turn directly benefited 3.9 million users.
China Southern Power Grid senior managers, in keeping with the Corporate Social Responsibility actions as a good citizen and valued member of society, have been collaborating with supervisory authorities of price and market to eradicate unreasonable price increases in power supplies through third party operators including commercial complexes, industrial parks and office buildings … and requiring these operators to reduce their energy prices (in a timely manner) to the end-user consumer which served to provide a sense of real, tangible assistance for businesses across all levels of society.
For example, under the requirements of the Shenzhen Government, CSG fully cooperated in taking enforcement actions against third parties organizations that have not refunded these reduced fees back to the end-user customer.
At present, among the more than 1,600 “middlemen” that are being regulated in Shenzhen, the status of 1,034 have been rectified and have been required to rebate these cost-savings back to their respective customers - a substantial return of more than 64 million yuan.
The market-oriented electricity marketplace is open and very competitive, which encourages competition and the current reduction in electricity prices. Ever since the COVID-19 outbreak, China Southern Power Grid has continued to promote reforms within the power system and expanding market-oriented power transactions which, in turn, significantly improve the quality of its services.
In the first half of Year 2020, the volume of market-oriented power transactions was 22.06TWh in the five South China provinces, a year-on-year increase of 20%. Meanwhile, the proportion was 45.8% with an average price decrease of 0.066 yuan/kWh for a combined total reduction of electricity fees of more than 14.56 billion yuan.
More CSG customers then had access to reduced power fees - due to market competition - and the pressure on enterprises was alleviated.
According to Liu Hui, general manager of Guizhou Shunfa Ferroalloy Co., Ltd., “Because of the pandemic, we dared not, at first, resume work because we were worried that the power supply volume was unbalanced and the final price to our business could be unstable. However, since the introduction of market-oriented trading of electricity, not only has the power supply been stabilized but we are directly benefiting from these reduced electricity prices. Our production continues to do well with lower electricity costs.”
Mr. Liu added that production capacity of the Guizhou Shunfa Ferroalloy Co., Ltd. has returned to normal.
After the Yufeng Cement Plant settled into its new facility within the port of Beihai Tieshan Port Branch of the Guangxi Fangcheng Port Group Co., Ltd. this year … the amount of electricity needed by the cement factory increased by 11MW. Electricity fees under this new program were then billed accordingly.
“We saw a reduction of electricity fees by seven million yuan in the first half of this year due to these important market-oriented electricity transactions, which eased the pressure on the port’s operation”, said Tang Hongjian, business department director, Yufeng Cement Plant.
In Yunnan, China Southern Power Grid senior managers also took advantage of coordinated market-oriented electricity sales by contacting upstream and downstream enterprises and negotiating with power generation enterprises for their support to maximize pricing benefits for users.
Concurrently, CSG staff worked diligently to communicate these price reductions with users and utilized “big data” available from the comprehensive energy service platform to help its clients with their load forecasting, which in turn provided substantial electricity savings.
Zhang Wenfeng, general manager of CSG’s Finance Department, said, “CSG will follow this bold new policy of reducing industrial and commercial electricity prices by 5% until the end of this year at the requirements of the ‘Government Work Report’ through the decisive leadership of the CPC Central Committee and the State Council.
On the basis of full implementation of the new phased policy of reducing prices in the first half of 2020, CSG senior managers look to further implement these five measures to reduce electricity prices.
It is expected that in Year 2020, CSG will have directly reduced the electricity fees for general businesses and large industrial enterprises by approximately 20 billion yuan.
