The integration of power markets across five regions in southern China has opened new avenues for reducing electricity costs, a key expense for the artificial intelligence (AI) industry. With power trading now governed by a unified set of market rules, AI data centers can purchase relatively cheaper electricity from other regions and concentrate their computational tasks during off-peak hours to save costs.
According to the Global Times, a state-run English-language newspaper, the southern power market, which includes Guangdong, Yunnan, Guizhou, Hainan, and Guangxi Zhuang Autonomous Region, officially began full operations. More than 290,000 market participants, including power generation companies, electricity retailers, large power users, energy storage operators, and virtual power plants, have registered.
Previously, inter-provincial power trading was possible, but it faced restrictions in contract and trading methods. The recent unification of trading rules is expected to enhance inter-provincial power transactions. These five regions fall under the jurisdiction of China Southern Power Grid, a state-owned power company, while other regions are managed by the State Grid Corporation of China. China Southern Power Grid initiated a pilot program for unified settlement of the five regional power markets in July 2022, which has now been fully integrated.
The integration is anticipated to lower electricity costs for AI data centers. These centers can adjust their power consumption based on prices rather than relying on fixed power sources. In May, nine data centers in Guangdong purchased a total of 17.45 million kWh of green power from Guangxi and Yunnan at a trading price of approximately 0.40 yuan per kWh, about 0.13 yuan cheaper than similar transactions within the province.
Additionally, data centers can increase computational tasks during periods of low electricity prices and reduce non-urgent tasks during high-price hours, effectively managing their power consumption. This year, the average regional electricity price for the computing sector in Guangdong has dropped by 32.2% compared to the same period last year.
As electricity costs decrease, token prices are also expected to fall. According to the China Center for Information Industry Development (CCID), the share of electricity costs in data center operating expenses has risen from about 40% in the past to 50-60% recently. The China Academy of Information and Communications Technology reported that the average daily token usage in June 2026 reached approximately 500 trillion, quadrupling from December 2025.
Meanwhile, a report by JPMorgan Chase released in May indicated that the average electricity price in China for the fourth quarter of 2025 is projected to be $0.08 per kWh, compared to $0.18 in the United States. This suggests that electricity costs in China are about 56% lower than in the U.S. The Wall Street Journal also reported in December that some data centers in China pay less than half the electricity rates of their U.S. counterparts.
* This article has been translated by AI.
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