Wholesale electricity prices across southern China fell month on month in June as the region entered its flood season, boosting clean energy generation capacity.

Data from the southern regional power market showed the average settlement price on the user side of the wholesale market stood at 0.3261 yuan/kWh in June, down 6.3% from May, with medium- and long-term contracted prices averaging 0.3285 yuan/kWh, a 5.9% month-on-month decline across all five provinces.

Spot market prices diverged between eastern and western provinces. Western provinces benefited from abundant hydropower output during the flood season, with prices continuing to fall, while eastern provinces saw slight month-on-month increases due to rising summer air-conditioning demand.

Yunnan's day-ahead average price posted the sharpest drop at 18.8% month on month, followed by Guizhou and Guangxi with declines of 11.2% and 3.7% respectively. In contrast, Guangdong and Hainan saw day-ahead prices rise 9.2% and 7.3% month on month.

Inter-provincial trading continued to play a key role in optimizing resource allocation across the region. Total cross-provincial settlement electricity reached 24.04 TWh in June, up 28.1% month on month.

Yunnan, Guangxi and the Lancang River upstream power plants leveraged clean energy cost advantages to deliver an additional 2.43 TWh to Guangdong through the spot market. Cross-grid trading also expanded, with Xinjiang, Gansu, Hunan and other provinces concluding transactions with Guangdong totaling 0.28 TWh for the month.

China's first market-based transmission rights transaction was completed in June. Guangzhou Power Exchange and Beijing Power Exchange jointly organized Yunxiao DC transmission rights trading, with 113 market entities from Guangdong and Anhui participating, resulting in 21.16 GWh of traded electricity.

On the retail side, the average user settlement price was 0.3271 yuan/kWh in June, down 3.5% month on month. Yunnan's retail settlement price plunged 26.0% month on month, the steepest decline among the five provinces. As wholesale prices fell, retail electricity companies saw improved financial conditions, with the industry approaching breakeven and losses narrowing significantly.

Retail companies in Guangdong, Guizhou and Hainan all returned to profitability, while Guangxi continued to reduce losses. Yunnan experienced minor wholesale-retail price inversions due to low retail contract prices during the flood season, though overall risks remained manageable.