Source: Economic Reference Newspaper
Original title: Promote the market-oriented reform of electricity prices to ensure the security of energy supply
In October this year, the National Development and Reform Commission issued the Notice on Further Deepening the Market-oriented Reform of Feed-in Tariffs for Coal-fired Power Generation (hereinafter referred to as the Notice). The current electricity price reform has further highlighted the market-oriented orientation. From the perspective of power generation, in 2019, the price authorities issued the "Guiding Opinions on Deepening the Reform of the Feed-in Tariff Formation Mechanism for Coal-fired Power Generation", and established a market-oriented electricity price mechanism of "benchmark price + floating up and down", and coal-fired power generation in various places formed prices by participating in electricity market transactions. Previously, about 70% of coal-fired power generation was formed by participating in the electricity market to form feed-in tariffs, and this reform clearly promoted the remaining 30% of coal-fired power generation to enter the electricity market, thus realizing the full liberalization of feed-in tariffs on the power generation side. From the perspective of electricity consumption, about 44% of the current industrial and commercial electricity consumption has formed electricity prices through participation in the market. This reform clearly proposes to promote the orderly promotion of industrial and commercial users to enter the electricity market and purchase electricity according to market prices, while canceling the long-term sales price of industrial and commercial catalogs.
It is imperative to accelerate the reform of electricity prices
Some time ago, due to the mismatch between the supply side and the demand side, coal prices rose rapidly, and the cost of coal-fired power generation could not be transmitted to end users through the market, the power supply was in short supply, and there was a situation of power curtailment in many places, which caused widespread concern in society.
From the supply side, the first nine months of this year's raw coal production increased by about 6% year-on-year, excluding the Spring Festival and last year's low base and other factors, the actual growth rate of domestic raw coal production this year is low, and the increase in coal production is relatively slow. In terms of import replenishment, the supply of the coal market has been affected by factors such as the overseas epidemic, showing a situation of reduced imports and increased prices, the amount of coal imports is much lower than the same period in previous years, and the import price has also risen rapidly, directly affecting the normal supply of coal in some parts of the south.
From the demand side, due to the continuous recovery of China's economic operation, the rapid growth of electricity consumption, coupled with factors such as cold weather, the mismatch between supply and demand levels has led to the occurrence of power curtailment in some places in the early stage, such as industrial enterprises in many places in Guangdong Province are required to "open three stops four" or even "open two stop five", "open one stop six" staggered peak electricity consumption.
On the surface, it is due to insufficient coal-fired power generation, but the deep reason is the long-standing contradiction between "market coal" and "government electricity", and the power generation cost due to the reasonable rise in coal prices is difficult to "go out" through the electricity price. Therefore, it is imperative to accelerate the reform of electricity prices.
Reflect the market orientation and adhere to the protection of agricultural electricity
The electricity price reform has the following three distinctive characteristics:
The first is to maintain the stability of electricity prices for residents, agriculture and public welfare undertakings. In this reform plan, it is insisted on maintaining the stability of electricity prices for residents, agriculture, and public welfare undertakings, that is, the electricity used by residents, agriculture, and public welfare undertakings is still guaranteed by power grid enterprises, and the current price level remains unchanged.
Second, the high-energy-consuming industry is formed by market transactions and is not limited by 20%. This reform clarifies that the market transaction price of high-energy-consuming enterprises is not limited by 20%, that is to say, the transaction price of high-energy-consuming enterprises is allowed to rise more. Although for high-energy-consuming enterprises, they may face the risk of a sharp rise in the cost of electricity, but this is also conducive to curbing the blind development of high-energy-consuming industries, encouraging high-energy-consuming enterprises to increase investment in technological transformation, improve energy efficiency, and better digest the impact of rising electricity prices.
The third is to pay attention to regional electricity market transactions and promote the optimal allocation of power resources between regions or on a larger scale。 On October 15, the National Development and Reform Commission revised and issued the Measures for the Pricing of Transmission Prices for Inter-Provincial and Inter-regional Special Projects (hereinafter referred to as the Pricing Measures), further improving the scientificity and rationality of the verification of transmission prices for inter-provincial and inter-regional special projects, supporting the inter-provincial and inter-regional consumption of new energy, better serving regional electricity market transactions, and promoting the optimal allocation of power resources in a larger regional scope。
The Pricing Measures have improved and perfected the current pricing measures from seven aspects, including "establishing a price mechanism approved in advance and periodically checked", "increasing the relevant content of cost supervision", "clarifying the scope of special projects and the form of single electricity price", "strengthening transmission price supervision", "improving transmission price flexibility", "strengthening detailed incentive measures" and "clarifying the regular verification mechanism and pricing principles after the expiration of the operation period", which has reserved space for further enhancing the flexibility of the transmission price mechanism of special projects and promoting inter-provincial and inter-regional electricity market transactions.
Limited impact on current prices is good for energy security in the long run
For industrial and commercial users, the full liberalization of coal-fired power generation feed-in tariffs and the expansion of the range of fluctuations may push up the cost of electricity for industrial and commercial users. Especially for high-energy-consuming enterprises, their electricity costs will increase even more. This requires relevant enterprises to accelerate technological progress, strive to improve digestion capacity, and minimize the transfer to downstream enterprises and consumers through price increases.
Electricity prices are a foundation of the entire price system, and electricity price adjustments will have some reactions to many products and industries. Since the current reform has maintained the stability of residential and agricultural electricity prices, the impact on the consumer price index (CPI) is small. As the price of electricity traded in the market rises, the increase in the cost of electricity for upstream production enterprises may drive the rise of the industrial producer price index (PPI). However, taking into account the situation of different users, the relevant departments have also made a series of targeted arrangements: First, all localities have orderly promoted industrial and commercial users to enter the market according to the situation, and established a power supply purchase mechanism for power grid enterprises to ensure smooth implementation; second, they have encouraged local governments to implement preferential treatment for small and micro enterprises and individual industrial and commercial households by taking measures such as phased subsidies; third, they have continued to implement a series of measures to benefit enterprises such as supporting the development of private enterprises, financing of small and medium-sized and micro enterprises, and manufacturing investment.
At the same time, according to the needs of the recent supply and demand situation, Shanxi, Inner Mongolia, Shaanxi and other regions, under the premise of ensuring safe production, promote coal mines with production potential to release advanced production capacity as soon as possible, and accelerate the production of approved and basically completed open-pit coal mines. Therefore, as the coal supply situation improves, the impact on the price level in general is limited.
In the short term, this reform is conducive to alleviating the huge cost pressure brought by high coal prices to power generation enterprises, thereby promoting power production, alleviating the shortage of power supply, and ensuring the safe and stable supply of electricity. According to data from the Shandong Electric Power Trading Center, on October 15, a total of 49 coal-fired power generation enterprises (97 units) participated with 79 electricity sales companies and 5 power users, with a transaction of 11.07 billion kWh of electricity, and the average transaction price was 19.8% higher than the benchmark electricity price. According to the disclosure of the Jiangsu Provincial Development and Reform Commission, Jiangsu Province organized a listing transaction in mid-October on the same day, with a total of 1.998 billion kWh of electricity and an average transaction price of 468.97 yuan / MWh.
In the long run, it will certainly be conducive to building a market-oriented electricity price mechanism that can fall and rise, accelerate the construction and development of medium- and long-term electricity trading, spot market and auxiliary service market, and promote the high-quality development of the power industry; it is conducive to guiding industrial and commercial enterprises and residents to use electricity rationally, accelerating the green transformation of enterprises, and helping to achieve the "double carbon" goal; it is more conducive to ensuring national energy security.
(Author: Xu Guangjian, Professor, School of Public Administration, Chinese Min University; Li Zhenyu, PhD candidate, School of Public Administration, Chinese Min University)
Editor-in-Charge: Wang Su