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Shandong Direct Power Purchase Pilot Work has Expanded, Shandong Aluminum Factories Will Receive Benefit

According to news report published on January 20, it has been learned from the ”Notice on Publishing Name List of Electricity Direct Trading Pilot Users in 2015” published by the Shandong Province Commission of Economy and Information Technology, the number of direct power purchase pilot enterprises in Shandong Province will double in 2015, the number of pilot enterprises will be expanded from 37 in 2014 to 82, annual electricity usage volume is 17.737 billion kwh, Chinalco (601600.SH/02600.HK) Shandong Co., Ltd Chemical Aluminum Oxide Factory for the first time was awarded 340 million kWh direct power purchase qualification.

The electricity direct trading pilot work in Shandong Province started in 2014, by adopting annual contract transaction model, the electricity user’s electricity purchase price consists of direct trading electricity price, electricity transmission and distribution price, and government fund and surplus; wherein, direct trading electricity price is determined independently by electricity user and the power generation enterprise through consultation, electricity transmission and distribution price and others are reviewed and approved by national price regulation departments.

Chinalco Shandong Chlorine-alkali Factory obtained direct power purchase qualification in the first batch, this year it again obtained 454 million kwh direct purchase electricity volume. Based on the transaction contract with power generation enterprise in 2014, each kwh is 0.015 cheaper than market price, which can save about 5 million yuan in electricity price.