Chalco tries direct power purchase

BEIJING, CHINA - Aluminum Corporation of China, Limited (Chalco), the largest electrolytic aluminum producer in the country, has signed a direct electricity purchase agreement with State Grid Corp. of China (SGCC), said sources.

If the electrolytic aluminum producer can gain the approval form regional governments, it will become the first one to purchase electricity directly from power grids firms, they added. However, the saying has not been confirmed by Chalco.

On March 6, 2009, the Chinese government announced a 15-company list for the trial operation of direct electricity purchase, including Yunnan Aluminum Co., Ltd., Shanxi Guanlv Co., Ltd., Qingtongxia Aluminum Group Co., Ltd., and Shandong Aluminum Industry Co., Ltd.

However, none of them has started direct electricity purchase yet, because of the price issue. Recently, The State Electricity Regulatory Commission (SERC) and other regulators released a circular, which is believed to push forward the direct purchase.

In particular, the prices in the 110KV (66KV) power transmission and distribution will have a discount of 10%, and those in the 220KV (330KV) power transmission and distribution will witness a discount of 20%, said the circular.