New actions in China's power reform

On December 25th, the guidance of the General Office of the State Council on the deepening of the market-oriented reform of power coal was officially announced. The key points of this guidance include: abolishing key contract coal from 2013 and eliminating the price of coal. Dual-track system; When coal-electricity linkage is implemented, when the price fluctuation of coal exceeds 5%, the on-grid tariff will be adjusted on an annual basis, and the power companies will digest 10% of the volatility of coal prices.

The cancellation of key contract coals is of great significance to many coal companies and power companies. It is estimated that many people will be confused after hearing this news. This will mean that the end of the historical problem of China's "dual track system" has played a very good role in reducing coal transaction costs, promoting the marketization of coal prices, and establishing new mechanisms for coal production, transportation and demand.

On the whole, the overall thinking of this reform is based on the principle of “difficulty first and then difficult”, seizing the current favorable opportunity, cancelling key coal contracts, and implementing coal prices. In the next step, we must also step up research on major issues such as the formation of electricity price formation mechanisms and power system reforms, the development of the coal market, and the market-oriented reforms of railway coal transportation. We must step up our efforts to gradually rationalize coal after maturity. Electrical relations.

In recent years, the practice shows that coal-power contradictions in the power generation industry chain (market coal, planned electricity) will lead to “soft and power shortages” in the short term, and “hard power shortages” (insufficiency of installed capacity) in the medium and long term. The combination of pure coal prices cannot solve the contradiction between coal and electricity, and it is impossible to truly realize the marketization of thermal coal. Therefore, coal price linkage and coal-electricity linkage are supporting reforms, and coal-electricity linkage is a more important component.

Coal and electricity linkage is definitely good news for private capital, which means that private capital can participate in power investment. In the current situation that the state-owned enterprises are dominating and the prices are controlled by the government, the opening up of electricity investment is not enough to attract foreign capital and private enterprises. For example, the power generation side has been open to foreign capital and private enterprises for more than 20 years. We did not see large inflows of foreign capital and private enterprises. Instead, we saw the withdrawal of foreign investment. To improve the efficiency of the industry, private enterprises and foreign capital must participate, and their entry will set a bottom line and necessary financial discipline for the energy industry.

The characteristics of electricity require that the government cannot stay away from energy, but the government should try its best to choose a market-oriented approach. Coal-fired linkage provides a good opportunity for the government to manage electricity prices in a market-oriented manner. The coal-electricity linkage mechanism allows coal prices to be linked to on-grid tariffs, while at the same time designing subsidies and taxes to manage terminal electricity prices. Specifically, after the coal-fired linkage, the government has two important aspects in the management of electricity prices. First, strict cost control is applied to power companies. Second, if the government considers it necessary to maintain a relatively stable electricity price, it can subsidize terminal electricity prices. Use coal taxes to suppress the rise in coal prices and build electricity (which can be used for subsidies). These are relatively market-oriented practices.

Coal-fired linkage is conducive to the market-oriented reform of electricity prices. Coal-fired electricity linkage is a market-based mechanism. From the beginning, the government can determine the linkage method according to the mechanism and gradually transition to the independent linkage of power companies; from the independent linkage of the government to set the scope of linkage, to the independent price adjustment by the power companies according to the market supply and demand. , Government price regulation. This is basically a process of price marketization. Developed countries also do the same in the energy adjustment mechanism such as the fuel adjustment mechanism. The key to energy reform is to establish a reasonable and transparent pricing mechanism. How to price it is inseparable from strengthening the financial integrity and energy efficiency of energy companies.

Whether it is coal-electricity linkage or deepening guidance for the reform of coal-fired power market, this is part of China's reform of the electricity market over the years.

The special nature of electric power products makes the electricity market a common phenomenon by state monopoly operations. At the beginning of the birth of its electricity network, most countries in the world tend to be monopolized and operated by the state. Regardless of the type of system that is implemented, there is almost no difference in this point. With the development of electric power technology and the development of the electric power market, even though all countries have experienced varying degrees of power market reforms, in order to maintain the stable operation of electric power networks, power systems in many countries still have varying degrees of monopoly. Operating.

The disadvantage of the state monopolizing the power market is obvious. The inefficiency and waste brought by monopoly directly drag the efficiency of the country's overall economic operation. In addition, the power system is also related to the industrial structure built on it. However, the reform of the electricity market is not fast in the world. Until today, countries all over the world are still trying to break the monopoly and market-oriented transformation of the power network system. This has become a global trend.

Why does the reform of the electricity market become a global problem? Why does the world have to spend so long to solve this problem? This is mainly determined by the special nature of electric power products.

Electricity is a special commodity, first of all, from its production and distribution process is more special, from production to user use to experience power generation, transmission, distribution, electricity sales, these four links must be completed in an instant, And it needs to be balanced at all times. For power users, there is a certain degree of regularity in electricity use, and there is also a certain degree of randomness. The demand is large, the grid load is large, the demand is small, and the grid load is small. In the face of such complex and ever-changing power demands, the power network system must meet user's needs through complicated technical means, which is a lot more specific than general commodities.

Power is a kind of network transmission and cannot be appeared alone. This makes the various members of the power system closely linked with each other. The operation of any one member will have an impact on the power system. For example, the immediate cause of the recent blackouts in India was the excessive use of electricity in India's Uttar Pradesh, Haryana, and Punjab, causing the grid to collapse. The operation of the electricity market is different from other bulk commodity markets and requires the production, trading, and consumption of electricity to be planned so as to ensure that electricity production and consumption are balanced in real time.

The particularity of electric power products, the scale of electric power networks and the operating characteristics of networks, the technical complexity of electric power systems, and the importance and strategic value of electric power to a country, make the safe and stable operation of electric power systems become The overwhelming driving force in the development of the power system.

Together these causes have created a national monopoly in the electricity market.

The inefficiency and waste caused by the national monopoly of the electricity market have made the countries of the world intolerable. For China, despite the drastic reform of power reform initiated ten years ago, the reform of the power system is now stagnating due to various reasons. Recalling the past experience and comparing recent trends in the development of the overseas power industry are not only related to the development of the electric power industry, but also to the development direction of China's future national economy. China must make drastic changes in its power reform.