Market-oriented approaches, reform to be leveraged to ensure people's living

China will take further steps to ensure electricity and coal supply this winter and next spring so as to ensure people's basic living needs and keep economic performance stable, the State Council's Executive Meeting chaired by Premier Li Keqiang decided on Friday.

Coal supply for power generation and residential heating, especially winter coal and electricity supply in Northeast China, must be ensured. Gas supply for household use will be enhanced, and natural gas will be transmitted as appropriate from South China to the north to safeguard gas-powered residential heating.

While ensuring workplace safety, coal mines with the potential to increase output will be urged to tap into their production capacity as soon as possible. Approved and basically completed open-pit coal mines will be encouraged to enter into operation and run at full capacity at a faster pace.

Additionally, coal mines that have ceased operations due to cited problems will be given assistance to advance rectification processes pursuant to laws and regulations to resume production as early as possible.

"Electricity and coal supply is crucial to people's lives and ensuring stable economic performance. It must be guaranteed. Ensuring energy security and keeping industrial and supply chains stable are among the six priority areas where protection is needed," Li said, "We must approach this issue from an overarching macro perspective. There mustn't be any letup in our efforts."

A temporary tax deferral policy will be implemented in response to the difficulties coal-fired power plants face. Financial institutions will be encouraged to meet reasonable financing needs of coal-fired power plants for coal purchase and other purposes.

A market-oriented pricing mechanism for coal-fired power will be improved. On the basis of maintaining stable electricity prices for household, agricultural and public good usage, all coal-fired power will be incorporated into the electricity market in an orderly fashion.

The floating band of market-based electricity transaction prices, which was between a 10 percent upside limit and 15 percent downside limit from benchmark prices, will now be adjusted in principle to a range of 20 percent fluctuations in both directions.

"The mechanism for coordinated supply of coal, electricity, oil, gas and transportation services will be better leveraged and market-based methods and reform measures effectively employed to ensure electricity and coal supply. For high energy-consuming industries, power prices can be shaped through market transactions and don't have to be subject to a 20 percent upside fluctuation limit," Li said.

Poorly conceived development of projects with high energy consumption and heavy carbon emissions will be resolutely curbed. Practices such as halting or limiting production in a formalistic manner or launching radical carbon emission reduction campaigns should be rectified.

Major coal-producing provinces and key coal enterprises should meet their tasks of output and supply increases as required. Electricity producers managed by the central government must ensure full operation of their coal-fired power units. Those who fail to meet their due responsibilities for energy supply will be held to account.

Efforts to cut emissions and boost utilization efficiency in major coal-consuming industries should also be enhanced, he said.

"We must carefully summarize experiences and lessons. We should follow a holistic approach and make our work more forward-looking, to ensure national energy security," Li said.