Chinese Factories Could Pay Up to 20 Percent More for Electricity Amid Power Cuts

As China contends with a nationwide energy crunch, the country's factories could pay up to 20 percent more for heating and electricity than the rate assigned to standard households, the Associated Press reported. On the other hand, factories could also pay heat and electricity prices that are 20 percent lower than the standard household rate within a billing range that a top official from a state economic management agency described as an "optimized pricing system."

Zhao Chenxin, the head of the National Development and Reform Commission, said that the 20 percent above or below threshold for prices was adjusted from the current ceiling of 10 percent and floor of 15 percent, the AP reported. The possibility of paying either much more or less is meant to spur factories to upgrade their facilities with more energy-efficient technologies, he added.

Facing a strain on energy supplies and the nation's commitment to conserve resources, some of China's residents have seen power cuts in their areas and have been forced to rely on generators and their cellphones when they need light.

The National Development and Reform Commission said Wednesday that despite the energy crunch, China will have sufficient energy supplies to heat residents' homes in the northern part of the country come winter, the AP reported.

For more reporting from the Associated Press, see below:

Factory in China
As China contends with a nationwide energy crunch, the country’s factories could pay up to 20 percent more for heating and electricity than the rate assigned to standard households. Workers are seen at a bags factory in Shenzhen, China on October 14, 2016 in China. Frédéric Soltan/Corbis via Getty Images

Chenxin also said China would honor its carbon reduction targets even as it ramps up coal production to meet increased electricity demands.

"All in all, we have the conditions, the resources and the capability to ensure the supply of heating for the winter," said Zhao.

Zhao said coal production was being increased along with natural gas, and energy reserves would be deployed to meet demand.

China is the world's largest carbon emitter, producing an estimated 27 percent of global greenhouse gases, followed by the United States. China obtains roughly 60 percent of its power from coal and is opening more coal-fired power plants, while also committing to reducing its use of the fossil fuel.

The country has set a target of generating 20 percent of its total energy needs from renewables by 2025, reducing total emissions starting from 2030 and becoming carbon-neutral by 2060.

China is also a world leader in producing solar panels and wind turbines for renewable energy. Despite that, the U.S. and others have urged China to adopt more ambitious efforts to keep rising temperatures to no more than 1.5 degrees Celsius (2.7 degrees Fahrenheit) over pre-industrial levels.

Zhao said there was no conflict between the uptick in coal production and China's carbon control targets.

"China has always honored our commitments for the goals we have set and we will do whatever we can to achieve them," Zhao said.

Power Cuts in China
Chinese officials on October 13 said they can ensure homes in the country’s north will be heated during the winter amid a nationwide electricity crunch that has brought power cuts in some areas. A man uses his smartphone flashlight to light up his bowl of noodles as he eats his breakfast at a restaurant during a blackout in Shenyang in northeastern China's Liaoning Province on September 29. Olivia Zhang/AP Photo