China’s ‘rust belt’ questions the price of power 

The country’s industrial North-east argues it gets a raw deal on electricity costs and it is hampering the region’s regeneration 

China’s ‘rust belt’ questions the price of power 
Cities like Harbin, in China's North-east, say they are disadvantaged by higher power costs.

(ATF) China’s North-east is pushing for a fairer deal on electricity prices claiming the country’s ‘rust belt’ is being held back by higher energy costs.

The region, which used to be home a large number of outmoded heavy industries, has higher electricity prices compared to other parts of China, such as Sichuan, where cheap electricity attracts high tech firms such as bitcoin farms.

National People’s Congress member Wang Li has now put forward a plan to adjust energy prices in the North-east as soon as possible. 

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“The price of industrial electricity in the North-east should be lowered as soon as possible. At least the industrial electricity price in the North-east should be equal to that of Shanxi Province, which is also an old industrial base," Wang said.

Local newspaper the Shenyang Daily reported that, for industrial enterprises, electricity costs are one of the main production costs. Among them, non-ferrous metal processing enterprises, such as those involved in electrolytic aluminum production and titanium processing, have to closely watch the cost of their electricity consumption. 

Wang Li, who is also deputy director of the Technology Quality Center of China Aluminum Shenyang Nonferrous Metals Processing Co Ltd, said that her recommendations were submitted at the fourth session of the 13th National People's Congress. They called for reduction the price of industrial electricity in the North-east and the promotion of regional economic development.

The price of industrial electricity in the region, she said, falls somewhere in the middle of for the country as a whole, with prices lower than the developed coastal areas but higher than Inner Mongolia, Qinghai, Tibet, Shanxi and other provinces. 

PRODUCTION COSTS

Using ferro-alloy production as an example, Wang Li said electricity costs account for 30% to 40% of production costs. When all electric furnaces are in operation, the annual electricity expenditure is 1.8 billion yuan, and the average electricity cost is 0.56 yuan/kWh. 

For companies in the same industry in Inner Mongolia, Qinghai, Tibet, Shanxi and other places, because the regional electricity price is lower than that in the North-east, their electricity cost is about 0.20 yuan/kWh. 

Wang Li said that the smelting of light metals such as aluminum, magnesium and titanium are all high energy-consuming production processes and if prices were reduced the region would be rejuvenated.

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