It is good to see China's State-owned power grid has been buying electricity generated privately, from March 1. But it still needs to raise the subsidy level and simplify the administrative approval procedures to form a real pricing market for electricity, according to an article in Guangzhou Daily.

Here is an excerpt:

In Tianjin, the State-owned power grid buys privately generated electricity at 0.4118 yuan (0.0654 US cents) per kWh, slightly higher than the price from a State-owned power plant.

The National Development and Reform Commission says the government will subsidise people using privately generated electricity to the tune of 0.35 yuan per kWh and will buy privately generated electricity at local desulphurization and denitrification prices.

At such low prices, it is impossible for privately generated electricity to expect to see substantial growth, because those generating the power do not enjoy government subsidies as State-owned power plants do.

If the government really wants to make private electricity a big contributor to China's power grid, or even a competitor to State-owned power plants, it should create a favorable environment for its development, especially in an environmentally friendly way.