Compiled by Caijing staff

(Caijing.com.cn) China's State Electricity Regulatory Commission has released details of an expanded direct power supply pilot scheme, intended to break the country's current electricity transmission duopoly. 

According to a notice on the regulator's website on June 30, a March direct power sale trial involving 15 electrolytic aluminum plants will now be expanded to enterprises with input voltages of no less than 110 kilovolts and power plants which began operation after 2004.

In addition, qualified generators must possess a minimum installed capacity of 100,000 kilowatts for hydropower plants and 300,000 kilowatts for thermal power generators.

However, the notice said that a final decision regarding which enterprises and power generators are involved in the trial, as well as new transmission fees, will depend on provincial authorities themselves.

The regulator said final electricity prices in the trial will consist of three components: ex-generator prices paid to power plants which are negotiated directly between end-users and power plants; fees paid to the government in the form of taxes; and transmission fees charged by grid companies.

The method of calculating actual transmission cost is a major focus of the regulator's power supply reform and the SERC said that a final policy regarding transmission fees in the trial has yet to be issued.

The two power grids, State Grid Corp of China and China Southern Power Grid, have been accused of exploiting their monopoly status by charging inflated transmission fees.

Under current regulations, the two state-owned power grids purchase all electricity generated by China's power plants at prices set by the National Department Reform Commission and then sell it on to end users. 

Local governments have been pushing for direct power purchases to support local enterprises, especially energy-intensive smelters and miners.