The National Development and Reform Commission says it does not rule out regulating coal prices

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The National Development and Reform Commission says it does not rule out regulating coal prices. sxcoal.com 2008-01-29 Yesterday, the National Development and Reform Commission held a press conference on the economic performance for the whole of 2007. **Zhu Hongren, deputy director of the Economic Operations Bureau under the National Development and Reform Commission, said that the current severe weather conditions ； As well as last year’s economic restructuring efforts, such as shutting down a number of small thermal power plants and taking measures to rectify and close coal mines ； Transportation bottlenecks and the continued rapid growth of energy-intensive industries have led to a shortage of coal and electricity supply. He also said that a price reform linked to coal and electricity generation will not be implemented for the time being to address the shortage of coal and electricity. 　　Rejection of reviving small-scale thermal power plants: Statistics released by the National Development and Reform Commission yesterday show that last year, the industrial development pace of energy-intensive sectors still exceeded that of general industry. Such a situation has led to a general shortage of electricity, while simultaneously causing a continuous increase in demand for coal. 　　“But it is impossible to overcome the current difficulties by increasing power generation through the expansion of small coal-fired and small thermal power plants. This is structurally unfeasible. ” Zhu Hongren said at the scene regarding ways to address the shortage of coal-fired power. 　　The National Development and Reform Commission stated yesterday that power plants are stepping up efforts to take various measures to urgently procure coal. However, the National Development and Reform Commission also believes that there is still a serious shortage of large-scale power plants and key power plants at present. There is a lack of demand-side management. Currently, the National Development and Reform Commission is requiring power plants to concentrate their valuable resources in key, core power plants. In cases of coal shortages or insufficient coal reserves, the National Development and Reform Commission has also pledged to take corresponding emergency safeguard measures for these key power plants. 　　Faced with the shortage of coal-fired power, the reform of prices linked to coal-fired power generation has been mentioned once again. Zhu Hongren revealed yesterday that no such reform will be introduced at present to alleviate the shortage of coal for power generation and electricity supply. He said that the lack of price coordination is not the main reason for the current situation. 　　Regarding the current situation, the solution recognized by the State Council remains to increase coal supply while ensuring safety. Last year, the country’s coal production was 2.523 billion tons, an increase of around 8%. The industry believes that, in terms of overall volume, there is no problem with coal supply. 　　But the National Development and Reform Commission raised objections to the coal mine safety rectification yesterday. Zhu Hongren believes that during the coal mine safety rectification last year, some areas were not categorized separately, resulting in all coal mines in a given area being shut down. 　　At present, the National Development and Reform Commission has ordered the relevant coal-producing provinces to put an end to the negative practice of shutting down all coal mines without taking measures to improve their conditions. Coal mines that were shut down due to compliance with safety requirements must resume operations to ensure supply, while those that are operating normally should have their production and supply arrangements secured during the Spring Festival period. 　　Regulation of “coal” prices is not ruled out. If coal supply returns to normal, the National Development and Reform Commission expects coal production to maintain moderate growth in 2008. However, in the event of significant fluctuations such as excessive and rapid increases in coal prices, Zhu Hongren said yesterday that price regulatory authorities would not rule out introducing relevant measures to bring about regulation. 　　Zhu Hongren said that, from the perspective of maintaining steady and rapid economic growth in our country, it is undoubtedly necessary for coal to experience moderate growth. He believes that coal is the most important fundamental raw material for the national economy. Coal accounts for 2/3 of our country’s energy structure. This trend will not change for a considerable length of time. 　　Regarding the development of the coal price market, Zhu Hongren admitted that reforms to the coal production, transportation, and distribution mechanisms are still ongoing. The current direction of these reforms is to adhere to a market-driven approach to resource allocation, and any method that conforms to modern market practices can be studied and explored. 　　Zhu Hongren said that in recent years, **efforts have been made to reform the ordering mechanism, with the overall approach being to uphold the dominant role of the market in resource allocation, reduce artificial interference, and prevent price distortions. 　　Zhu Hongren pointed out that during this proactive push, three major steps were taken within three years to transform the coal ordering conferences, which had existed for decades, into meetings aimed at linking coal production with demand. He said that such a direction for reform is one that is being actively promoted at present. The outcomes of pushing in this direction include the establishment of a centralized coal trading market, among others. Zhu Hongren believes that various other methods that conform to modern trading practices are also being actively researched and considered.