The Chinese Communist Party’s commission for deepening reforms on Tuesday approved a wide range of proposals for markets, including the country’s power networks and oil and natural gas markets, state broadcaster CCTV reported.

China will further reform and accelerate the construction of a power system that is “economically efficient, flexible and intelligent in supply and demand coordination”, the commission said.

The nation’s grid system is predominantly arranged around fixed, long-term power trading agreements, with a limited role for spot markets or flexibility of supply.

During a drought in August 2022, fixed, unidirectional power trading agreements forced hydro-dependent southwestern Sichuan province to export power out of the province to fulfil these contracts, even as consumers in the province endured power cuts.

In the oil and gas markets, China will focus on “improving national oil and gas security capabilities … and ensure stable and reliable supply”, the commission stated.

The proposals come amid an intensified focus on domestic energy security in the country, which is the world’s largest crude oil importer.
Source: Reuters (Reporting by Beijing Newsroom Editing by David Goodman and Sharon Singleton)