Southern Power Grid Responds to Regional Spot Electricity Price Fluctuations: Residential Electricity Prices Unaffected
Recently, the spot electricity market prices in Guangdong, Guangxi, Yunnan, Guizhou, and Hainan provinces have experienced a temporary increase, sparking online discussion. The average spot price in Guangdong has risen most significantly in the short term. Many netizens mistakenly believe that household electricity costs will increase accordingly, expressing concerns about family burdens.
A relevant official from the Guangzhou Power Exchange Center stated that recently, electricity spot market prices have shown a moderate upward trend, with larger increases on individual days. The electricity spot market refers to a market where electricity supply and demand are “bought and sold on the spot” – enterprises with electricity needs can place orders a day or even a few hours in advance, and power generation and transmission companies arrange production and transmission accordingly.
According to the Southern Power Grid, since the end of March this year, with the recovery of foreign trade and increased enterprise orders, electricity demand has risen. Data shows that since April, the cumulative electricity consumption in the southern region has reached 87.08 billion kilowatt-hours, a year-on-year increase of 14.0%.
At the same time, affected by the dry season in the southwest region and rainy weather in the south, the average daily hydropower generation in April decreased by 23% compared to March; the average daily generation of photovoltaic new energy in Guangdong decreased by about 20% during some periods. From the perspective of installed capacity structure, hydropower accounts for about 20% of the installed capacity in the southern region, and new energy accounts for more than 40%, totaling about 60%. However, due to the obvious seasonal impact on power generation (high proportion during the flood season and decreased proportion during the dry season), market transaction prices fluctuate accordingly.
How long will this price increase last? As the summer peak electricity consumption period approaches, how will we meet the peak demand? Will residential electricity be affected?
A relevant official from the Southern Power Grid introduced that the electricity market is divided into medium- and long-term markets and spot markets, and the spot market accounts for a relatively small proportion overall, with limited impact on electricity users. It is expected that before the western hydropower enters the flood season in mid-June, the power supply in Guangdong and the region will still be under temporary pressure, and high spot electricity prices may continue for a period of time, but the overall power supply will be sufficient.
It is particularly important to note that residential and agricultural electricity consumption is not affected by fluctuations in electricity market prices, and electricity prices will not change. Chen Wei, Deputy General Manager of the Guangzhou Power Exchange Center, clearly stated: “Residential and agricultural electricity prices are implemented according to the catalog prices approved by the state, and are not related to market changes. Prices are stable, and there is no need to worry.”
During this year’s peak summer period, the Southern Power Grid will work closely with the State Grid to provide power transmission support to areas with tight supply and demand through cross-operating area electricity trading, ensuring a stable and orderly power supply.