China Yangtze Power Co Ltd (CYPC) under China Three Gorges
Project Corporation (CTGPC) has announced that after completing its
2006 plan the Three Gorges Power Plant can produce approximately
45.8 billion kilowatt-hours of additional electricity, according to
People's Daily on June 26.
However, it seems that many consumers have not benefited from
the reforms that got underway in 2002.
With improvements in technology, the average cost price of
installed capacity fell to 4000 yuan (US$500) per kilowatt in 2005
from 5000 yuan (US$625) per kilowatt in 2002. According to
statistics this has resulted in investment being reduced by 140
billion yuan (US$17.5 billion).
With the cost price falling consumers still have to pay more
than previously. In 2004 the average power rate increased by 0.0284
yuan (US$0.00355) per kilowatt-hour over the last year, and by
0.0252 yuan (US$0.00315) per kilowatt-hour in 2005.
In 2004 approximately 1.7 trillion kilowatt-hours of electricity
was consumed and the figure reached 2 trillion in 2005. Based on
these figures, consumers are required to pay an extra 160 billion
yuan (US$20 billion), which equals the total investment on the
Three Gorges Project.
An anonymous official from the State Electricity Regulatory
Commission indicated that the nationwide shortage of electricity
lasting for several years had been eased and it was a golden
opportunity to deepen reforms within the industry.
In past years the production of the Three Gorges Power Plant was
unable to fulfill the needs throughout the country. But changes in
demand have created fresh opportunities to deepen reform.
The goals of reform have been identified as providing people
with cheaper and safer electricity by way of a high quality
service. But to the contrary consumers are paying more money for
power. On the one hand, the electricity industry has saved 140
billion yuan in investment; while on the other it has earned an
extra 160 billion yuan. Thus its profits have soared to 300 billion
yuan (US$37.5 billion). Meanwhile people have been required to
combat electricity shortages for three years.
The system of reform should break the monopoly, introduce
competition and improve the market efficiency. Yan Maosong, an
electricity expert, has pointed out that the reforms, deviating
from the original objectives, appeared to benefit a small number of
interest groups.
According to People's Daily, to some extent the reforms
were always mapped out by professionals in this area who themselves
maintained close relationships with the electricity giants.
The interest groups will only enhance their current position in
power generation and reject any measures that challenge them.
It seems that only through increasing public participation and
bringing a range of interest groups together can electricity reform
achieve any real success.
(China.org.cn by Wang Ke, June 27, 2006)
