Guizhou Reduces Peak-Valley Electricity Price Difference by 33% to Optimize Time-Based Pricing

Peak and Valley Price Gap Reduced by 33%! Guizhou Adjusts Time-of-Use Electricity Pricing

On May 16, the Guizhou Development and Reform Commission announced a public consultation regarding the optimization and improvement of time-of-use electricity pricing. The proposed changes involve adjustments to the peak, flat, and valley pricing periods. According to the draft consultation document, the fluctuations in time-of-use pricing will be based solely on the “on-grid electricity price” (purchase cost), while fixed costs such as transmission and distribution prices and system operation costs will no longer influence the pricing. This means:

• Peak price = Flat purchase price x 1.6 (60% increase);
• Valley price = Flat purchase price x 0.4 (60% decrease);
• Actual peak-valley price gap = (1.6 – 0.4) x Flat purchase price.

Given that the current flat purchase price in Guizhou is approximately 0.4 yuan/kWh, the theoretical peak-valley price gap is only 0.48 yuan/kWh (if fixed costs are included, it could reach 0.72 yuan/kWh). This 33% reduction in price gap directly impacts the “arbitrage space” for energy storage projects. While this policy has positive implications for reducing electricity costs for businesses and promoting the absorption of renewable energy, the significant changes have complicated the return expectations for energy storage investors.

To better utilize the signals from the peak-valley time-of-use pricing and guide electricity users in managing peak and valley loads, thereby improving power supply and demand conditions and promoting renewable energy development, the provincial development and reform commission has drafted the consultation document considering the electricity supply and demand situation, changes in electricity load, and characteristics of renewable energy output. The public consultation period is from May 16 to May 29, 2025. Feedback can be provided through the following methods:

1. Visit the Guizhou Development and Reform Commission’s official website (http://fgw.guizhou.gov.cn/) and submit suggestions in the “Opinions Collection” section.
2. Send your comments via email to jiageguanlichu@163.com.

Thank you for your support and participation!

Guizhou Provincial Development and Reform Commission

Notice on Optimizing and Improving Time-of-Use Electricity Pricing (Consultation Draft)

To all cities and development and reform commissions (bureaus), Guizhou Power Grid Co., Ltd., all incremental distribution network enterprises, and the Guizhou Electricity Trading Center:

In order to optimize the allocation of electricity resources and better serve the construction of a new power system with renewable energy as the main component, while promoting green and low-carbon energy development and improving the operational efficiency of the power system, we have drafted this notification in conjunction with our province’s electricity supply and demand situation, changes in electricity load, and characteristics of renewable energy output. The key points are as follows:

1. Scope of Implementation:
   • Applicable to industrial and commercial users in our province’s supply area that implement a two-part electricity pricing system (including direct electricity market transactions and agent purchase users), concentrated charging/discharging facilities for electric vehicles, and independent energy storage stations.
   • Public service electricity such as electrified railway traction, urban public transport, gas (natural gas, thermal) booster stations, water production, waste harmless treatment plants, and hospitals are excluded from time-of-use pricing.
   • Wastewater treatment plants can voluntarily choose whether to implement time-of-use pricing based on their actual electricity consumption.
2. Time Periods:
   • Winter (January-February, December):
     • Peak: 9:00 AM – 11:00 AM, 5:00 PM – 11:00 PM;
     • Flat: 8:00 AM – 9:00 AM, 11:00 AM – 5:00 PM, 11:00 PM – 12:00 AM;
     • Valley: 12:00 AM – 8:00 AM.
   • Non-Winter (March-November):
     • Peak: 8:00 AM – 9:00 AM, 5:00 PM – 12:00 AM;
     • Flat: 7:00 AM – 8:00 AM, 9:00 AM – 1:00 PM, 2:00 PM – 5:00 PM;
     • Valley: 12:00 AM – 7:00 AM, 1:00 PM – 2:00 PM.
3. Floating Ratios and Base:
   • The floating flat price for industrial and commercial users is based on the on-grid price (transaction price or agent purchase price), while transmission and distribution prices, system operation costs, government funds, and on-grid line loss costs are not included in the fluctuations. The peak price is 60% higher than the flat price, while the valley price is 60% lower than the flat price.
4. Other Matters:
   • Ensure the integration of market transactions with the time-of-use pricing policy. Power generation and consumption enterprises must declare time-of-use electricity volumes and prices in their medium- to long-term trading contracts, with the floating ratios not falling below the requirements set in this notification.
   • Losses or gains from implementing time-of-use pricing that cannot be directly transferred between the generation and consumption sides will be collected by the grid company and shared among all industrial and commercial users through monthly system operation costs.
   • Once the continuous settlement of the spot market is trialed, wholesale-side terminal users participating in spot trading will generally no longer implement the time-of-use pricing policy.
   • Users under the time-of-use pricing must install time-of-use metering devices to measure electricity consumption separately for peak, valley, and flat periods.
   • Other unspecified matters will continue to follow the relevant provisions of the Notification on Improving the Time-of-Use Electricity Pricing Mechanism (Qianfa Gai Price [2023] No. 481).
5. Requirements:
   • The development and reform departments of all cities (states) should organize and arrange carefully according to this notification, strengthen publicity, and ensure comprehensive implementation. They should enhance business guidance and supervise incremental distribution network enterprises in adhering to this notification.
   • Guizhou Power Grid Co., Ltd., all levels of power supply bureaus, and all incremental distribution network enterprises should expedite the upgrade of user electricity metering devices and information systems, effectively promote policy awareness, and enhance service.
   • The Guizhou Electricity Trading Center should strictly adhere to this notification’s requirements, improve market trading rules, and oversee the signing of trading contracts while enhancing policy promotion and service for market entities.
   • This notification will take effect on June 1, 2025. Any previous policy provisions that conflict with this notification will be superseded by this notification. Issues arising during implementation should be reported promptly to the provincial development and reform commission.

Guizhou Provincial Development and Reform Commission

May 16, 2025