Reform of the Electric Power System will Accelerate the Release of "Dividend" in the Second Half of the Year
Category：Industry News Release Time：2019-09-05 Number of Browse：0
The reporter learned about that after a series of measures for direct reducing the electricity price, the accumulative reduction of cost for enterprises' electricity consumption exceeded 210 billion yuan within two years. In the first half of this year, marketized transaction volumes in many places exceeded the annual size of last year and the reduction space was further expanded. In the second half of this year, the reform of the electric power system will have a new round upsurge which will accelerate the release of corresponding dividend.
However, it is remarkable that the decline of electricity price means pressure for enterprises of grid, coal power and new energy. The experts in the industry suggested that the recent bankruptcy liquidation of thermal power plants should be highly focused on. Establishing price formation mechanism, making medium and long term contract price of electric coal, supervising the performance of the contract, granting new energy subsidies and other work should be made.
Cost reduction of electricity consumption for enterprises within two years reached 210 billion yuan
From July 1 this year, the second batch of measures for electricity price reduction organized and implemented by National Development and Reform Commission officially began to be in force. "Plus the first batch of measures for electricity price reduction starting to be implemented on April 1, the cumulative reduction cost of enterprises' electricity consumption for the two batches of measures is 84.6 billion yuan which we have calculated. Among them, the reduction cost of electricity consumption for general industrial and commercial enterprises is 81 billion yuan. The task demand of 'average electricity price of general industry and commerce shall reduce by another ten percent' proposed in Report on the Work of the Government is full completed." Deputy Director of Policy Research Office of National Development and Reform Commission and press spokesman Mengwei introduced before.
2019 Report on the Work of the Government proposes to reduce enterprise-related fees through reform. We shall deepen the reform of power marketization, eliminate additional fees on electricity price and lower the cost of electricity for manufacturing, and average electricity price of general industry and commerce shall reduce by another ten percent. After "electricity price of general industry and commerce shall reduce by ten percent on average" proposed in 2018, Report on the Work of the Government puts forward quantitative index of reducing the electricity consumption burden for enterprises once more.
According to the introduction of Sun Chuanwang, the Associate Professor of School of Economics of Xiamen University, based on the calculation of 2015 Input-Output, the proportion of the electricity price cost in enterprise's total production cost is 2.8%. However, different industries exist huge differences. In mining industry, chemical industry, metal smelting industry and other industries, the cost proportion of electricity price is between four percent and nine percent. Among enterprises belonging to general industry and commerce, the electricity price cost accounts for less than 1.5%. In household consumption expenditure, the electricity price cost occupies around 1.3%. Generally speaking, the reduction of electricity price is beneficial to stimulate investment.
China Electricity Council (hereinafter referred to as "the CEC" ) released the data which showed that China's power enterprises actively implemented the reduction demands on electricity price in general industry and commerce in 2018. In the whole year, China cut electricity consumption cost by 125.79 billion yuan in total in four batches, lowering 7.9 cents per kilowatt hour on average, down 10.1%.
"The electricity charge not paid by enterprises is 125.79 billion yuan, of which 75 percent is undertaken by the power grid enterprises and 25 percent is shouldered by the government." Xuejing introduced. She is the Deputy Director of Industry Development and Environmental Sources Department, CEC.
Annual Development Report of China's Power Industry 2019 released by CEC, shows that after power grid enterprises surrendered part of profits to power using enterprises, the total profits of 2018 declined 24.3% from last year. At the same time, power using enterprises were influenced by the low base number from last year and power generation growth at a low speed, realizing the total profits of 221 billion yuan in 2018, an increase of 23.8% from last year.
Among them, thermal power generation enterprises realized 32.3 billion yuan in 2018, still with a loss scale of 43.8%; the growth of profits for wind power and photovoltaic generation and nuclear power all surpassed 20%. But subsidies for wind power and photoelectricity had not arrived timely, enterprises' paper profits cannot be transferred to actual capital flow in the short run and the turnover of capital was still difficult.
The trading scale of electricity market explodes and releases dividend
Except lowering additional fees of electricity price and other direct measures, actively expanding the trading scale participated by enterprises belonging to general industry is also encouraged by National Development and Reform Commission and the electricity cost needs to be reduced further through market mechanism.
The statistical data from Guangdong Power Grid affiliated to Southern Power Grid showed that the scale of Guangdong's electric power market gradually expanded in the first half of this year, and the main players in Guangdong electric power market broke through 10,000 with the total amount of ten thousand eight hundred and ninety-nine. The trading volume in electric power market also grew rapidly. The cumulative electric quantity on trading reached 165.82 billion KWH in the first half year, up 25.4% from the same period of last year. The total electric quantity on trading in the whole year in 2018 was exceeded. About seven billion yuan of electricity cost was saved for the users.
Xinjiang Uygur Autonomous Region, a large energy production region. In the first half year, the electric quantity of marketization trading in Xinjiang Uygur Autonomous Region reached 55.675 billion KWH in total which exceeded the scale of the whole of last year. Among 55.675 billion KWH, the electric quantity of direct trading for big consumers was 44.682 billion KWH, trading substitution for shutdown of coal-fired units was 5.318 billion KWH, trading volume of new energy alternatives to self-generation power plants was 4.775 billion KWH and 900 million KWH was traded by electric heating.
According to the calculation, beneficial from the direct trading of big users, the electricity consumption of relevant enterprises was reduced by about 0.1 yuan per KWH. Xinjiang directly traded with big users using innovative bundling of new energy and thermal power which lowered the electricity price further.
Guangxi also regarded green, clean and environmental protection as the core of "supply and demand docking" of energy and power trading, and actively expanded the space for absorbing clean energy. Deng Haitao introduced, the Director of Market Department of Guangxi Branch of China Datang Co., Ltd., "the installed hydropower capacity of Datang in Guangxi Province is 9.17 million KWH, occupying a half of the installed hydropower capacity in the whole Autonomous Region. After entering the trading platform, we can directly connect with enterprises and successfully solve the dilemma of 'peak valley' and the difficulty of 'surplus water' in hydropower."
From January to June in 2019, absorbing more than 10 billion KWH of nuclear power and 3.127 billion KWH of abundant hydropower through the market, the realization of "zero surplus water" in the first half year of Guangxi was guaranteed.
As of the first half of this year, the trading scale of Guangxi Power Exchange Center has doubled for four consecutive years, and the cumulative electric quantity of marketization trading has exceeded 170 billion KWH, exceeding 60 billion KWH annually, reaching a record high; the trading frequency has doubled year by year, and 144 batches of trading have been organized cumulatively; the electric quantity of marketization trading accounts for 14.1% of the electricity sales of the electric quantity of main power grid in 2016. It rose to 41.3% in 2018, the proportion ranking among the top in China. The cumulative reduction cost of electricity consumption for enterprises has exceeded 15 billion yuan.
Reform of the electric power system accelerates a new round of upsurge in an all-round way .
The sudden increase in the scale of electricity marketized trading is a miniature of the overall acceleration of reform of the electric power system this year. It is expected that a new round of upsurge will be ushered in the second half of the year and the corresponding dividend will be released.
At the end of June this year, the National Development and Reform Commission issued a "Notice on the Full Liberalization of the Electricity Generation and Utilization Plan for Operating Power Users", clarifying that the electricity generation and utilization plan for operating power users will be fully liberalized in principle to improve the marketability of electricity transactions. In addition to residents, agriculture, important public utilities and public welfare services and other industries of power users, as well as the auxiliary power and line losses necessary for power production and supply, other power users are all operating power users.
As an important link in the new round of "liberalization of two sides" in electric power system reform, the liberalization reform of the power generation and utilization plan will be gradually expanded. In March 2017, it was proposed to "reduce the planned electric quantity of existing coal-fired power generation enterprises year by year" and in July 2018, it was proposed to "fully liberalize the power generation and utilization plan for users in the four major industries of coal, steel, nonferrous metals and building materials". Now, a key step has been taken.
According to the prediction of Guojin Securities Research Report, the full liberalization of the power generation and utilization plan for operating power consumers is expected to bring about 200 billion to 300 billion kilowatt-hours of another marketized trading volume this year.
At the same time, the National Development and Reform Commission also approved the fourth batch of 84 incremental power distribution projects, with pilot projects extending to the county areas. In addition, the first batch of 8 power spot market pilots have all started simulated trial operation, and the shareholding system transformation of several power trading institutions is progressing.
Sun Chuanwang believes that one of the difficulties in the current phase of the reform of electric power system lies in the construction of effective power spot markets. Another difficulty lies in the improvement of the retail markets. With the participation of power grid enterprises, many other retail enterprises do not have market advantages in real competition and are difficult to survive or even face bankruptcy. The future reform direction can focus on the binding and combination of electricity sales side and comprehensive energy services, which will effectively open up a new market path and reduce the electricity price of consumers.
The CEC suggests that on the basis of implementing the requirement to reduce the average electricity price of general industry and commerce by another 10% in 2019, it should continue to clean up unreasonable price increases in the link of standardizing the transfer of power supply, ensure that the dividend of electricity price reduction will benefit end users, and realize increasing efficiency in cost reduction for electricity consuming enterprises. At the same time, the power transmission and distribution price level for the second supervision cycle should be reasonably approved, power transmission and distribution price mechanisms to ensure the sustainable development of the power grid should be established and perfected, and power grid investment and construction, cross-subsidy of electricity price, and the East giving assistance to the West and other problems should be comprehensively solved to support the healthy and sustainable development of the power grid.
Faced with the difficult operation situation of coal and electricity enterprises, the CEC proposes to strengthen the supervision of medium-term and long-term contracts for electricity and coal to ensure the performance of the contract, improve the price terms, clarify the annual long-term agreement price mechanism, and prohibit using the monthly long-term agreement, outsourcing long-term agreement and other binding annual long-term agreements to raise prices in disguised form, and maintain the continuity of the policy of import coal, guide the market to make reasonable expectations, control the price of electricity and coal within a reasonable range, and ease the pressure of operating difficulties of coal and electricity enterprises. In addition, we shall as soon as possible push forward the adjustment of the benchmark price including tax and the price range of the medium-term and long-term agreement contract for electricity and coal, coordinate coal production enterprises to adjust the price of electricity and coal accordingly, and promote the effective transmission of tax reduction dividends to end users.
The CEC also suggests that the publication of renewable energy subsidy catalogue and the distribution of subsidy funds should be accelerated according to the agreement, so as to solve the problem of huge arrears as soon as possible and ease the pressure on enterprise operation and funds. Suggestions also contain developing financing varieties aiming at wind power, photovoltaic and other clean energy projects, including subsidies receivable into the scope of current loan support which will solve the subsidy fund gap in the whole industry; Green credit policies to promote the development of renewable energy and other clean energy should be implemented. (Reporter Wanglu)
