BEIJING, Sept 1 (Reuters) - China will spend at least 2 trillion yuan ($315 billion) to improve its power grid infrastructure over the 2015-2020 period, a report by a government newspaper said on Monday.
Despite falling power consumption growth, China is working to upgrade its cross-country power transmission capacity in order to reduce coal consumption along the smog-hit eastern coast and provide markets for energy producers in the resource-rich far west, where electricity demand is considerably weaker.
It has already built long-distance ultra-high voltage power lines connecting giant thermal power and hydroelectric stations in the west to eastern coastal regions like Shanghai.
The 2015-2020 investment is likely to provide a boost for sectors like copper. Demand from the power sector accounted for nearly half of China’s estimated 8.7 million tonnes of refined copper consumption last year.
In a report published on the website of the National Energy Administration (NEA), China Electric Power News said the country was aiming to increase the total length of its high-voltage transmission lines to 1.01 million kms (627,585 miles) by the end of 2020, more than double the 2014 level.
Citing a new government action plan, it said China would work to make prices more flexible in order to reflect changes in costs and fluctuations in demand.
Wholesale and retail tariffs are currently set by the state.
Some regions are introducing “differential prices” for industrial consumers that fail to meet environmental targets, while power producers that have installed clean generation technology also receive a subsidy from the government.
The government adjusted tariffs in April this year following a rapid decline in the cost of coal, but it eventually aims to let the market decide, and is setting up spot electricity trading platforms that will allow generators and users to set tariffs themselves.
$1 = 6.3760 Chinese yuan Reporting by David Stanway; Editing by Richard Pullin