Focus on Arts and Ecology

The big environmental stories in the Chinese media this week (1-7 May)

One of China’s two state-owned grid companies has reported a 926 million yuan (US$130 million) first quarter loss, due to the impact of Covid-19 on electricity usage and central government policy to lower power prices for downstream users, reported Yicai.
 
According to Yicai, electricity use was down 6.5% year-on-year, and the central government mandated a 5% price discount for a majority of industrial users. This discount started on 1 February and will last until June 30. 
 
To implement the policy, China’s two state-owned grid companies, State Grid and Southern Power Grid, together waived 59.5 billion yuan (US$8.5 billion) of electricity bill payments. State Grid also made a public commitment to absorb revenue cuts on its own, rather than pass them on to power generation companies upstream.
 
China Dialogue has reported on the government’s long-term efforts to boost the economy by keeping power prices low, sometimes at the expense of grid company profits. Electricity can account for 30% of costs in power-intensive sectors such as concrete manufacturing. 
 
Covid-19 has highlighted the role of state-owned energy companies as instruments for wider economic goals. But though suppressing prices can help some industries, it can harm others.

See our latest report on the crisis in China’s power storage industry.