Original title: Deepening the market-oriented reform of coal-fired power generation feed-in tariffs
An important step in the market-oriented reform of coal-fired power generation feed-in tariffs——
The rise and fall of coal and electricity prices affects geometrically
Our reporter Gu Yang
Since the beginning of this year, the global energy industry has undergone new changes, international energy prices have risen sharply, and domestic power and coal supply and demand have continued to be tight, which has affected normal economic operations and residents’ lives. In this context, the calls for further reform and improvement of the market-oriented formation mechanism of coal-fired power prices, and deepening of the market-oriented reform of coal-fired power generation on-grid tariffs, are increasing.
On October 12, the National Development and Reform Commission issued the “Notice on Further Deepening the Market-oriented Reform of Coal-fired Power Generation Feed-in Tariffs” (the “Notice”), which made arrangements for further deepening the market-oriented reform of coal-fired power generation feed-in tariffs. Once the document was released, it attracted widespread attention from all parties in the market. Experts interviewed by the Economic Daily reporter said that the relevant reform measures are based on the current situation to ensure the safe and stable supply of electricity, but also have a long-term view to serve the construction of a new power system. This move marks an important step in the reform of the electricity market.
On-grid tariff reform focuses on four major measures
“This reform thoroughly implements the decisions and deployments of the Party Central Committee and the State Council, and in accordance with the overall idea of’controlling the middle and liberalizing the two ends’ of the power system reform, the orderly liberalization of electricity prices in competitive links has adapted to the current situation.” National Development and Reform Commission Price Director Wan Jinsong said.
It is reported that in 2019, my country issued the “Guiding Opinions on Deepening the Reform of the Coal-fired Power Generation On-grid Tariff Formation Mechanism”, which changed the coal-fired power generation benchmark on-grid tariff mechanism that has been implemented for many years to a “base price + floating” market-based electricity price mechanism. Electricity generated by coal-fired power generation in various places is traded through the electricity market, and the price is determined by the market.
“The implementation of the market-based electricity price mechanism of’base price + fluctuating up and down’ has strongly promoted the process of electricity marketization. In 2020, more than 70% of coal-fired power generation will form an on-grid electricity price through market transactions.” Wan Jinsong said this time Further deepen the reform of on-grid tariffs for coal-fired power generation, focusing on four aspects-
First, the on-grid tariff for all coal-fired power generation will be liberalized in an orderly manner. In 2020, more than 70% of coal-fired power generation will form an on-grid tariff through market transactions. After the reform, all coal-fired power generation electricity will enter the electricity market in principle, and the on-grid electricity price will be formed within the range of “base price + fluctuating” through market-based transactions.
The second is to expand the range of fluctuations in market-based trading electricity prices. The fluctuation range of coal-fired power generation market transaction prices has been expanded from the current float not exceeding 10%, in principle not exceeding 15%, and expanding to not exceeding 20% in principle. The price formed by market transactions in high energy-consuming industries is not subject to Up to 20% limit. The spot price of electricity is not limited by the above range.
The third is to promote all industrial and commercial users to enter the market. Promote all industrial and commercial users who have not yet entered the market to enter the electricity market in an orderly manner, and cancel the electricity sales price in the industrial and commercial catalogue. For industrial and commercial users who have not directly purchased from the electricity market, power grid companies will purchase electricity as an agent. Encourage local governments to implement phased preferential policies for small and micro enterprises and individual industrial and commercial households.
The fourth is to maintain stable electricity prices for residents and agriculture. Residents (including schools, social welfare institutions, community service centers and other public welfare users that implement residential electricity prices), agricultural electricity supply is guaranteed by grid companies, and the current sales electricity price level remains unchanged.
“This reform is conducive to giving full play to the role of the market mechanism, promoting the stable operation of the power generation industry, ensuring the safe and stable supply of power, and promoting the accelerated construction and development of the power market with a long-term view, supporting the construction of new power systems, and serving the green and low-carbon transformation of energy.” Wan Jinsong Say.
Classification adjustment forces transformation and upgrading
“For power users, the fluctuation of the on-grid tariff for coal-fired power generation does not mean that the price of electricity will rise.” Han Fang, deputy director of the Planning and Development Department of the China Electricity Council, said. Transformation, after the on-grid price fluctuations become larger, it will promote the market’s willingness to develop new energy to a certain extent. For example, some companies will build their own distributed photovoltaic power stations. From the perspective of power consumption, it will help to enhance the awareness of energy conservation and efficiency and promote enterprises. Continue to increase energy-saving renovation, continuously improve the level of energy efficiency, and help achieve the “dual carbon” goal.
In response to this reform, it is clearly stated that “market transaction electricity prices in high energy-consuming industries are not subject to a 20% rise.” Wan Jinsong said that resolutely curbing the blind development of “two highs” projects is an inherent requirement for achieving high-quality development, and deepening the market-oriented reform of electricity prices In the process, it is necessary to give full play to the guiding role of electricity price signals, strengthen classification adjustments, curb unreasonable power consumption in high-energy-consuming industries, improve power supply and demand, and promote enterprises to continue to increase investment in energy-saving technological transformation in the long-term, improve energy efficiency, and promote Transform and upgrade the industrial structure to achieve green and low-carbon development.
According to reports, in addition to clarifying that the market transaction price of high energy-consuming industries is not subject to a 20% increase, the reform also prohibits local organizations from organizing special power transactions, and prohibits power companies and market trading institutions from participating in special power transactions and settlement of electricity charges.
“After the reform is implemented, it will guide high-energy-consuming companies to increase market transaction electricity prices, and more fully transmit the pressure of rising power generation costs, forcing such companies to take the initiative to save energy and reduce emissions.” Han Fang said.
Recently, coal prices have risen sharply, and the coal power industry has experienced varying degrees of operating difficulties. In order to cope with the continued tight supply and demand, the coal-fired power generation market-oriented transaction electricity prices in the electricity market transactions in many places have risen, which has played a positive role in alleviating the operating difficulties of local coal-fired power generation companies.
Experts said that after the reform, all coal-fired power generation will be promoted to enter the market in an orderly manner. At the same time, more substantial up and down restrictions will be set, and the market price of energy-intensive industries will not be limited. These measures will help the market mechanism to play the role of the market mechanism and make the market electricity price even higher. A good reflection of the power supply and demand situation and cost changes, facilitate the structural adjustment and functional transformation of the coal-fired power generation industry, and promote the coordinated development of upstream and downstream coal power.
Limited impact on industrial and commercial electricity costs
This reform promotes all industrial and commercial power users to enter the market, and expands the range of fluctuations in market-based trading electricity prices. Will it affect the operating costs of industrial and commercial users, especially small and micro market entities?
In this regard, Peng Shaozong, deputy director of the Price Department of the National Development and Reform Commission and a first-level inspector, said frankly that the on-grid tariff for coal-fired power generation will be fully liberalized, and the range of fluctuations will be expanded. Under the situation of tight power supply and demand, market transaction electricity prices may rise. To a certain extent, push up the cost of electricity for industrial and commercial enterprises.
“It needs to be divided into user categories. For high-energy-consuming enterprises, the market transaction price of electricity is not subject to a 20% increase. Such an increase is unlimited, which means that companies with more electricity and high energy consumption will pay more. Other industrial and commercial users, Electricity consumption per unit of product production is small, and electricity costs account for a relatively low proportion of total costs. Market transaction electricity prices will rise to a certain extent, and enterprise electricity costs will increase, but the overall cost is limited.” Peng Shaozong said.
It is reported that, in order to help small, medium and micro enterprises as much as possible to reduce cost pressure, the National Development and Reform Commission fully considers the actual situation of various market users and makes targeted arrangements.
One is to promote the entry of industrial and commercial users into the market in an orderly manner. For users of 10 kV and above, all enter the market; other industrial and commercial users can be promoted to enter the market as soon as possible based on actual conditions.
The second is to encourage local governments to adopt phased policies to provide preferential treatment based on actual conditions to reduce the burden on users of electricity.
The third is to continue to implement a series of relief measures that have been introduced to support the development of private enterprises, financing for small, medium and micro enterprises, and manufacturing investment to help enterprises, especially small, medium and micro enterprises, to reduce cost pressures.
Peng Shaozong also emphasized that this reform maintains the stability of residential and agricultural electricity prices and has no direct impact on the consumer price index (CPI). If the market transaction electricity price rises, it will push up the electricity cost of enterprises, especially upstream production enterprises, to a certain extent, and have a certain boosting effect on the industrial producer price index (PPI), but the reform measures will help improve the power supply and demand situation, and better Ensuring the electricity demand of enterprises, promoting stable production of enterprises, and increasing market supply are conducive to price stability on the whole. On the whole, the impact of this reform on price levels is limited.
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