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Electricity market reform speed up Many areas will benefit
August 04, 2022 Source: Economic Reference
The electricity market is an indispensable part of China's high-standard market system and the construction of a unified national market. Recently, the southern regional power market to start trial operation, the national unified power market construction has begun to bear fruit. The acceleration and deepening of power market reform will bring greater development opportunities for new energy formats such as energy storage, electric vehicles, and virtual power plants.
Southern Regional Electricity Market Starts Trial Operation
"In the past, there was usually only one trading opportunity per month. If the water supply suddenly increased, it would be impossible to trade in the market. In the future, we can trade once a day or even every 15 minutes. We can also quote more autonomously and flexibly, and buyers can shop around." Ye Rui, head of the marketing department of Huaneng Lancang River Hydropower Co., Ltd., deeply felt the changes brought about by the power market in the southern region.
Guangdong, Guangxi, Yunnan, Guizhou, Hainan and other five southern provinces and regions have outstanding complementary advantages in resources between the east and the west, large-scale power exchange, and close power grid connections. As China's first regional power market to start trial operation, the southern regional power market has realized cross-provincial and cross-regional trading of power in stock for the first time, which means that power plants and users in five provinces and regions can buy and sell electricity in real time across provinces and regions, and electricity prices can rise or fall according to actual demand.
"Through the southern regional power market in stock trading system, power generation companies can quote up to 1.5 yuan per kilowatt-hour, and as low as a few cents or even zero yuan." Cai Baorui, deputy general manager of China Southern Power Grid Power Dispatching and Control Center, said that through the power in stock market, the price of electricity at different times and different spaces can be found according to the real-time supply and demand of the market, thereby promoting the efficient use of energy in the entire society.
At the same time, the medium-and long-term trading cycle of the southern regional power market will fully cover the year, month and week, and the variety and compensation mechanism of the auxiliary service market will be further improved.
Liang Zhifei, deputy director of the Development Research Department of the Guangzhou Electric Power Trading Center of China Southern Power Grid, introduced that after the establishment and improvement of the southern regional power market, it will carry out shorter-cycle and higher-frequency weekly transactions, which can cope with the randomness and volatility of new energy generation and consumption. Make energy resource allocation more flexible. All market entities can participate in power trading in a variety of ways, such as medium-and long-term and in stock-term, to promote the optimal allocation of power resources in a wider range, and to promote the green and low-carbon transformation of energy production and consumption patterns.
For the whole year of 2022, the cumulative market-oriented trading electricity in the southern regional electricity market is expected to reach 1.11 trillion kWh, close to the total electricity consumption of the whole society in the three provinces of Guangdong, Yunnan and Guizhou in 2021. By 2023, the proportion of market-oriented electricity in the region is expected to reach about 80%, and the number of market entities participating in the transaction will increase to more than 800 million.
Speed up the construction of a unified national electricity market
Behind the start of the trial operation of the southern regional power market is the acceleration of the construction of a unified national power market.
Lin Shanqing, deputy director of the National Energy Administration, introduced that after years of reform and exploration, the framework of my country's power market has gradually become clear. The medium and long-term auxiliary service market systems for power across the country have basically been established, the in stock market pilots have achieved uninterrupted operation, and a diversified competitive power market pattern has been initially formed. Form, the national market-oriented trading electricity is1 trillion kilowatt-hours in 2016 increased to 3.8 trillion kilowatt-hours in 2021.
The National Development and Reform Commission and the National Energy Administration issued the "Guiding Opinions on Accelerating the Construction of a Unified National Electricity Market System".In 2025, "the national unified power market system will be initially established", "the market-oriented allocation of resources across provinces and regions and the scale of green power transactions will be significantly improved".
According to Sun Jian, Director of the Reform Division of the Planning and Development Department of the China Electricity Council, at present, the inter-provincial and intra-provincial medium and long-term power trading mechanisms have been basically established and operated normally, and the construction of inter-provincial and intra-provincial in stock pilot markets has made positive progress. Based on the provincial power market, the construction of a unified national power market has achieved initial results.
The data shows that,In the first half of 2022, all power trading centers across the country organized 2.48 trillion kilowatt-hours of electricity traded in the market, an increase of 45.8 percent over the same period last year, and the proportion of electricity traded in the market accounted for 60.6 percent of the electricity consumption of the whole society, and the power market is becoming the most important way to allocate power resources.
Market participants also increased significantly. AsOn June 30, 2022, there were 435683 registered market members, 16 times the number at the end of 2015. "This year, all industrial and commercial users will enter the electricity market, and users who are temporarily unable to participate in direct electricity transactions will also participate in the market through agency power purchases." Sun Jian said.
In addition, the ability to allocate resources across provinces and regions has continued to improve.In the first half of 2022, the national inter-provincial transmission capacity will be 0.29 billion kilowatts, and the country will send 766.2 billion kilowatt-hours of electricity across provinces, an increase of 4.9 percent over the same period last year.
"At present, it is the critical moment to meet the peak and enjoy the summer. Shanxi, Hebei, Inner Mongolia, Jilin, Xinjiang and other sending provinces can support the receiving provinces through inter provincial in stock transactions, so as to achieve a wider range of power surplus and shortage." Electric Power Planning and Design Institute of Clean Energy Research Institute Assistant Fan Pengfei said.
New opportunities for development in many fields
The construction of a unified national power market has entered the fast lane, power generation companies and users have a richer range of options, and electricity prices can rise and fall, which will bring new development opportunities to more industries.
Fan Pengfei introduced that the power in stock market creates a market environment by releasing price signals with time and space differences, and further creates conditions for the innovative development of new energy formats such as energy storage and electric vehicles. Currently, ShandongSix independent energy storage power stations participate in in stock transactions; Shanxi, in the form of load aggregators, aggregates more than 20000 charging piles in 11 cities across the province, and is exploring the integration of "new energy plus electric vehicles" into the power in stock market.
According to the analysis report of CITIC Securities, the reform of power marketization is deepening, and after the in stock market gradually matures, the price fluctuation price difference will be further increased, and thermal power enterprises will"Grabbing electricity" is changed into "asking for profits"; New energy enterprises can improve the consumption efficiency and electricity consumption income by improving the accuracy of power prediction and participating in market-oriented transactions. Electricity sales companies have changed from "earning price difference" to "doing service", managing user load curves and optimizing electricity consumption behavior. New formats such as energy storage and virtual power plants will also open up more profit space.
"With the construction of new power systems, the positioning of different types of units in the market is also changing. regular coal-fired and gas-fired units and clean energy units such as hydropower, nuclear power and new energy power plants need to be considered in the market mechanism as to how they can compete with each other in the in stock market." Sun Jian said.
AsBy the end of June 2022, the installed capacity of wind and light new energy will reach 0.68 billion kilowatts, accounting for 27.82 percent of the total installed capacity. The proportion of new energy participation in the market has increased significantly year by year, accounting for about 30% of new energy power generation.
"At present, the market value of new energy green and low-carbon attributes is still not fully reflected." Sun Jian said that the next step should focus on speeding up the standardization of the power market, establishing a sound standard system framework, and unifying relevant technical standards. At the same time, it is necessary to study and carry out the analysis and evaluation of the operation of the in stock market, especially to promote the steady and orderly entry of new energy into the in stock market.
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