Recently, in many regions in southern China such as Guangdong Province, the sharp increase in energy prices due to the blockade of the Strait of Hormuz in the Middle East has led to a surge in electricity prices. In April, electricity prices in several southern provinces have skyrocketed, with Guangdong’s prices approaching 1 yuan per kilowatt-hour multiple times, doubling compared to the same period last year. Experts point out that Guangdong, a major power generation hub highly dependent on imported fuels, is extremely sensitive to geopolitical situations. The blockade in the Strait of Hormuz has caused international energy supply pressure to quickly translate into local fluctuations in power generation costs.
According to the latest data released by the Guangzhou Power Exchange, the average spot price in the southern region from April 1 to 23 reached 468 yuan per megawatt-hour, up 38% from March. Specifically, Guangdong, Guangxi, Yunnan, Guizhou, Hainan recorded prices of 533 yuan, 382 yuan, 399 yuan, 356 yuan, and 493 yuan per megawatt-hour respectively.
Reported by the Daily Economic News, the short-term surge in spot prices in Guangdong is particularly prominent. From March 27 to the present, real-time average prices on the generation side soared from a low of 247 yuan per megawatt-hour to a high of 978 yuan per megawatt-hour; the recent average price increased from a low of 217 yuan per megawatt-hour to a high of 678 yuan per megawatt-hour.
On April 7, the real-time average price on the generation side in Guangdong was 976 yuan per megawatt-hour; on April 11, it reached 978 yuan per megawatt-hour.
Last April, the Guangdong Province electricity spot market did not experience such significant price surges. For example, on April 7, 2025, the real-time average price on the generation side was 314 yuan per megawatt-hour, and on April 11, 2025, it was 346 yuan per megawatt-hour.
The “2025 Annual Report on Guangdong’s Electricity Market” published by the Guangdong Power Exchange showed that the weighted average spot price on the generation side in Guangdong last year was 316.9 yuan per megawatt-hour, while the real-time weighted average price was 313.9 yuan per megawatt-hour.
This means that in just a few months this year, the spot market prices in Guangdong have more than doubled.
It’s not just Guangdong; recently, the entire southern region’s electricity spot market has seen temporary high prices. Lammuda Power’s spot market data showed that from April 13 to April 19, the weekly real-time average prices in Guangdong, Guangxi, Hainan, Guizhou, and Yunnan markets were higher than their coal-fired power generation benchmark prices.
Why are electricity spot prices, including in Guangdong, experiencing high prices?
Xu Chuanbo, associate professor at the School of Economics and Management at North China Electric Power University, stated that the primary driver behind the recent significant price increase in Guangdong’s electricity spot market is the ongoing deterioration of the geopolitical situation in the Middle East, particularly in the Strait of Hormuz.
In March 2026, shipping in the strait almost came to a standstill, with numerous oil tankers stranded in the Persian Gulf. As an outward-oriented power system highly reliant on imported fuels, as of the end of 2025, coal and gas installations accounted for 30.3% and 21.9% of Guangdong’s power sources, respectively, totaling over 52%.
Impacted by the blockade in the Strait of Hormuz, the long-term LNG procurement contracts between Guangdong Energy Group and Qatar Energy Corporation were put on hold. Coupled with the damage to Qatar’s LNG production facilities due to the US-Iran conflict, by mid-April, China’s comprehensive LNG import prices had risen by 9.38% compared to the previous month. “The significant increase in fuel costs on the generation side, through the marginal unit pricing mechanism in the spot market, has directly driven up system clearing prices.”
China is the world’s largest LNG importing country, with Guangdong being the most densely populated province in terms of LNG receiving terminals in China. As the engine of the Chinese economy, Guangdong’s power supply is highly dependent on “sea route imports.” The blockade in the Strait of Hormuz this time not only disrupted logistics but also directly impacted Guangdong’s long-term energy security buffer mechanism.