Nine state-owned power companies in Guangxi recently jointly requested assistance from the authorities, stating that the local electricity sales industry has accumulated losses exceeding 2 billion yuan (RMB) in the first eight months of this year. The total annual loss could surpass 5 billion yuan, with a possibility of a large number of companies going bankrupt and delisting in the fourth quarter.
According to a report by “First Financial”, on September 30, nine companies jointly submitted an urgent request, including Guangxi Guoneng, Huarun Power (Guangxi), and Guangxi Datang Guiguan among the electricity sales companies. An insider from one of the participating companies confirmed the authenticity of the documents.
The request document indicated that the electricity sales industry in Guangxi incurred losses of over 2 billion yuan from January to August, with an expected additional loss of over 1 billion yuan in September, potentially bringing the total annual loss to over 5 billion yuan. Some larger electricity sales companies suffered monthly losses exceeding 130 million yuan.
The document also stated that continuous losses have depleted the companies’ own funds and borrowing capacity, with many companies facing insolvency. If the situation persists, a large number of electricity sales companies may face bankruptcy or market exit in the fourth quarter.
The nine companies requested a temporary deferment of the electricity settlement fees for September, allowed adjustment of retail electricity prices based on wholesale purchasing costs, proposed changes in the settlement method for some new energy electricity quantity, and requested permission to pay penalty fees to terminate fixed price contracts.
Electricity sales companies mainly purchase electricity from the electricity wholesale market and sell it to industrial and commercial users, relying on profit margins from buying and selling.
The joint document stated that the average spot trading price in Guangxi for next-day power supply increased from 0.368 yuan per kilowatt-hour in April to 0.395 yuan in September, while the electricity sales companies’ average retail contract price was only around 0.260 yuan. Nearly 80% of local retail contracts use fixed prices, making it challenging for electricity sales companies to raise prices in response to the increased purchasing costs.
In a report by “First Financial” in May this year, a Guangxi electricity sales company purchased electricity from the medium to long-term market at 0.32 yuan per kilowatt-hour but sold it to users at a fixed price of 0.26 yuan per kilowatt-hour.
Calculations based on half from medium to long-term contracts and half from spot trading showed that the company had initially expected the spot electricity price to drop to 0.09 yuan per kilowatt-hour to reduce overall purchasing costs. However, the actual spot price was significantly higher than expected, leading to the failure of the previous calculations.
Industry sources in Guangxi’s electricity sales sector told “First Financial” that some companies had previously engaged in aggressive pricing to attract customers at low prices, exacerbating the current losses.
Earlier reports indicated that in the first quarter of this year, 146 electricity sales companies participating in wholesale trading in Guangxi collectively lost 645 million yuan in the electricity trading segment. On average, each company lost about 4.42 million yuan. In April, several electricity sales companies jointly issued an urgent appeal, citing risks of the disruption of the financial chain and market exit for businesses.
Similar situations have also emerged in Guangdong. The “2026 Guangdong Electricity Market Semi-Annual Report” released by the Guangdong Power Trading Center showed that out of 500 electricity sales companies participating in retail transactions in the first half of the year, 298 companies incurred cumulative losses, accounting for 59.6%. The industry’s average profit per kilowatt-hour was only 0.0039 yuan.
“First Financial” quoted industry insiders as saying that these figures only reflect the book results of the electricity trading system. If operational and market development costs are taken into account, the actual losses of the electricity sales companies could be even higher.