Since the beginning of this year, multiple provinces and regions including Guizhou, Hebei (mainly Hebei Southern Grid), Hubei, Shaanxi, Jilin, Yunnan, Chongqing, Liaoning, and Henan have successively announced the cancellation of fixed time-of-use electricity pricing. The electricity pricing mechanism that had been in place for over 40 years – "government-set unified rates with peak/off-peak periods" – is being replaced by real-time bidding in the spot electricity market.
What this means: when electricity is expensive or cheap is no longer determined by administrative documents, but by real-time supply and demand. For the cement industry – a heavy electricity consumer – this round of market-oriented electricity pricing reform brings a completely new bill that needs to be recalculated.
1. Daytime is no longer the “expensive zone” – cement plants must change their electricity usage habits
The core logic of fixed time-of-use pricing was to divide the day into three periods: peak, flat, and valley – high electricity usage during the day meant peak pricing, while low usage at night was valley pricing. But this 40-year-old pattern has been completely rewritten by the large-scale integration of solar PV into the grid.
In regions with a high share of renewable energy generation, solar power peaks at noon when sunlight is abundant, resulting in ample electricity supply – meaning prices should theoretically be low. Yet under the old mechanism, midday was still classified as a peak period with higher rates. Cheap electricity wasn't cheap when it should have been – the price signal had become distorted.
Han Fang, Deputy Director of the Planning and Development Department at the China Electricity Council, said plainly: "The old fixed time-of-use pricing model, with its rigid time-segment division, can no longer flexibly adapt to the new power system with a high share of renewables."
The result of correcting this distortion is a midday electricity price reduction. The Shaanxi Electric Power Trading Center even issued a clear advisory to market-based users: "The lowest electricity prices will mainly occur during midday hours when solar generation is high. All market-based users should monitor price trends and adjust their electricity usage habits accordingly."
For cement enterprises, this signals a complete overhaul in electricity usage patterns.
Electricity is one of the major cost components in cement production. Clinker power consumption typically ranges from 50–60 kWh/t, and cement grinding from 20–35 kWh/t, putting total cement production power consumption at roughly 55–75 kWh/t. Electricity accounts for 15% to 25% of total production costs. While the rotary kiln in the clinker calcination stage must run continuously and has rigid power demand, other processes such as cement grinding, packaging, and conveying offer some scheduling flexibility – provided sufficient clinker and cement storage capacity exists. It is common industry practice to shift grinding operations as much as possible to low-price electricity periods.
In the past, companies tried to schedule production during fixed low-price periods. Now that electricity prices fluctuate in real time, cement plants need to transition from a simple, rigid approach to intelligent, data-driven electricity usage.
2. "Smart power usage" will become a core competitive capability for cement companies
The sector hit hardest by this reform is energy storage. Zhang Jianing, Senior Policy Research Manager at the China Energy Storage Alliance, disclosed that after the policy took effect, user-side energy storage projects in provinces like Jiangsu, Zhejiang, and Guangdong – which previously enjoyed high time-of-use price differentials – as well as grid-side storage in Hebei and elsewhere, saw "revenue drop by approximately 50% in some provincial projects."
The experience of energy storage serves as a useful mirror for the cement industry – it highlights a simple truth: the core logic of this electricity pricing reform is "winning on real merits," with no guaranteed minimum returns or safety net. In the past, storage projects could reap profits from fixed peak-valley spreads. Now they must actively analyze market conditions and precisely capture dynamic price differences. The same applies to cement companies.
With the rapid rollout of new electricity policies and the gradual normalization of spot electricity market operations, cement companies now need the professional capability to understand and navigate the "electricity stock market." The spot electricity market works like a real-time stock market – prices change minute by minute based on supply and demand. Companies need people who can interpret clearing prices, structure medium-to-long-term contracts, and calculate the optimal combination of spot purchases and contract positions. This is no longer the traditional scope of power management in a cement plant. It is a new capability threshold – and, in essence, a real lever for enhancing corporate competitiveness.
Currently, in response to the challenge of optimizing production and power allocation after the cancellation of fixed time-of-use pricing, the industry has begun exploring AI-based smart solutions. These solutions accurately forecast electricity prices, integrate full production data, and develop scientifically optimized production schedules – enabling greater use of low-price power and self-generated electricity, thereby minimizing electricity costs.
Conclusion
In summary, deregulating electricity prices marks yet another retreat of "outdated mindsets". From capacity reduction to the carbon market, and now to market-based electricity pricing, the cement industry is no longer facing cyclical fluctuations – but a systematic reset of the underlying institutional logic. Reform brings not just opportunities, but also a test. Do it right – and the savings go straight to profits. Get it wrong – and the cost will be real.
At CCSP, we supply cement engineering solutions and high-quality spare parts. Whether you need to upgrade equipment for cement plant, improve energy efficiency of your rotary kiln, or explore intelligent production control systems, our team is ready to support your plant's transition to smart, cost‑effective electricity use.
