Power network "surgery" symptomatic transmission and distribution separation

Recently, during the second session of the Modern Energy Development Forum held in Beijing, the participating power experts focused their attention on the power system reform that has passed for a full decade. As for the results of the previous decade of electric reform and how to further promote electric reform in the future, there are many consensuses among the participating experts and there are also many differences of opinions.

Ten years of achievements and problems

Ten years of phone calls have made great achievements. According to the data, China’s installed power generation capacity reached 1.06 billion kilowatts in 2011, and 700 million kilowatts in nine years, a three-fold increase from 356 million kilowatts in 2002. China has become the world’s largest hydropower, wind power, and power generation country, and has resolved The “hard gap” problem of power generation installations that has been plagued for many years; the power transmission line above 220 kV has increased from 207,000 km to 475,000 km, an increase of 2.3 times, and the total length and transmission capacity of DC transmission lines have risen to the top in the world; The rate was reduced by 12.4%; the line loss was reduced by 13.3%; the CO2 emission was reduced by 14.1%; and the time for residents to use electricity was cut down from 11.72 hours/year to 7.01 hours/year.

However, in the process, the power industry also has a series of problems. In particular, in recent years, the contradiction between coal and electricity has been prominent, power generation companies have suffered serious losses, industrial and commercial enterprises are heavily burdened with electricity, and new energy and renewable energy development have been constrained. “For example, the continuous losses of the thermal power sector of the five major power generation groups accounted for a total loss of RMB 92.1 billion from 2008 to 2011, and the asset-liability ratio has exceeded the red line of 85% that is limited by the SASAC.” One person from the Big Five Power Group who declined to be named Say.

Ten years of consensus on electrical reform

On the one hand, the power system reform has achieved great results. First of all, the power system has basically achieved the separation of government and enterprises, the separation of factories and networks, and the separation of the main and auxiliary industries. The power market reform has made new progress and new breakthroughs. Among them, the separation of factories and networks has enabled the power generation side to enter the competitive industry, forming a diversified investment body of state-owned, collective, private and foreign investment, and a pattern of all-round competition. The concept of competition has penetrated into the “pre-project—power plant construction—operation management— - Mergers and reorganization "in various fields. The fierce competition and the active development are unprecedented.

Secondly, the power industry has achieved a leap-forward development, and the safety and power supply capacity has been significantly enhanced, which has basically achieved the overall balance of electricity supply and demand in the entire society and solved the persistent and large-area “electricity shortage” that has plagued China for many years.

Again, the layout of the power structure has been optimized, the level of technology and equipment has been greatly improved, and energy conservation and emission reduction have achieved significant results. New energy and renewable energy have achieved rapid development. At the same time, the development of super (super)critical units and large combined cycle units has been vigorously promoted, and efficient, clean coal power generation technology has been adopted to develop cogeneration, cogeneration of thermal power and cooling, and joint supply of thermoelectric gas; The large-scale development of the interconnected power grid promotes the optimal allocation of power resources across provinces and regions, adopts advanced transmission, transformation and distribution technologies and equipment, improves the safety and reliability of power systems, and reduces transmission, change, and distribution losses.

On the other hand, the power system reform has failed to achieve its planning goals, and it has also faced many new problems. The power market reform is the correct direction. In recent years, the contradiction between coal and electricity has been intensifying, the cost of abatement of power production has risen, new energy and renewable energy have been connected to the grid, and electricity price and electricity allocation still use planned management methods. The role of the market in regulating supply and demand and optimizing the allocation of electric power resources cannot be achieved. To interweave many new and old issues such as play, it is urgent to deepen the reform of the power market to resolve.

In addition, the industry generally believes that a single centralized auction market model is not suitable. From the perspective of theory and foreign power market practice, the pattern of buying more and selling more and more market trading platforms is the basic condition for the power market to achieve fairness and efficiency. A single centralized bidding market model has been proven to be vulnerable to market forces. It is generally accepted by those in the industry to carry out bilateral transactions between large-scale users and power generation companies, to gradually open up user selection rights, and to realize the transition from “planned power” to “dual track power” and to promote the overall process of power marketization reform.

Disagreement on the future of electric reform paths and options

"According to the reform measures proposed in various aspects of the current study, there are basically three options for breaking the monopoly and establishing the electricity market, that is, separation of transmission and distribution, separate distribution, and independent dispatch. However, all three methods are based on the current grid operating model 'shock therapy'. The reforms of the formula have a great impact on the existing interest pattern, and the risks and costs of reform are relatively high, which are not conducive to a smooth transition, and will also make it difficult for the reform decision-making to form a consensus, thus delaying the reform process. Therefore, there is still considerable controversy. A person from the National Energy Administration, who is willing to be named, said.

For example, separate transmission and distribution, separate distribution, and distribution of power grids, assets, and staffing should undergo major "operations." As the function interface of the current allocation and distribution is not very clear, the separation will have a certain degree of technical difficulty in operation. After separation, it will increase transaction links, externalize internal conflicts, increase management and transaction costs, and will also be responsible for each other after separation. Unclear brings major hidden dangers such as electric power security. In addition, separate distribution will make cross-subsidization difficult to operate and will cause new contradictions such as the construction of rural power grids.

The electricity market is an integrated system that encompasses a variety of power trading activities. The construction of the electricity market should first focus on the construction of the market system, and the deepening of reforms should be based on standardized direct purchase contracts for large users, long-term power purchase contracts for the government, and short-term balanced market construction. The entry point, at the same time establish a corresponding legal security system, credit system (such as large-scale purchase of the security deposit system), etc., in order to protect the normal operation of the market and sustainable development.

Some people think that the most prominent and most important contradiction currently facing the reform of the power market is that the two most important players in the electricity market, namely, the power generation companies (producers) and the power users (consumers), are systematically “isolated”. It is impossible to directly “face” the market transaction, the market mechanism is basically out of order, and the relationship between the price level of electricity and the price ratio between upstream and downstream products is artificially distorted. “As a result, the key to the next step in reform is to realize that buyers and sellers of large-scale power transactions directly enter the market for trading. Relatively speaking, this method is a gradual reform method, and the cost and risk of reform are relatively small and easier to implement.” A person from the China Energy Research Institute, who declined to be named, said.

Suggestions for future electric reform
First, the power system reform should have a top-level design. At present, the development of the power industry is difficult, the people's minds are changed and the direction is lost, and the power reform is continued. The industry and all sectors of the community have requested to strengthen the overall planning and conduct top-level design.

Second, the reform of the power system should take into account both the major issues facing the current stage and the strategic response to foreseeable challenges. From a long-term and strategic point of view, the main problems faced by China's power industry are: how to ensure the security of power supply in all regions; and how to effectively generate guidance signals for power generation investment. How to carry out bulk electricity trading? There is no bilateral transaction, no financial contract, single purchase bidding model is not suitable for market sustainable development, simple direct purchase of electricity by large users is not a scientific approach. In the development of large-scale power trading, comprehensive consideration shall be given to the “West-to-East Electricity Transmission” plan, direct power supply for large users, short-term power balance and system auxiliary services. The direct purchase of electricity by large users needs to consider real-time balance, transmission congestion, and other issues; large-scale wind power integration must also be solved with market mechanisms.

Third, the long-term transmission of provincial electricity transmission planning contracts, and the implementation of short-term inter-provincial power market transactions. Trans-provincial and inter-provincial transactions in China already have a market structure of buying and selling, and a short-term inter-provincial power trading market should be established on the basis of the regulation of long-term trans-provincial power transmission project contracts, so as to protect the power supply security of the recipient region. Sending benefits to power companies in the region.

Then, the distribution network is a natural monopoly and should not participate in competition. Distribution networks are natural monopolies and should not participate in competition. Furthermore, the challenges faced by distributed energy access to distribution networks are unknown. Issues such as distributed power access, natural gas cogeneration, and microgrid need to be considered. There is no contradiction between the distribution network and large-scale direct purchase of electricity and bilateral transactions. After the transmission and distribution costs are independently accounted for, it is not necessary to split transmission and distribution.

Finally, supporting reforms of government management methods. The main contradiction and crux of the current power system is not the natural monopoly of the power grid itself, but the administrative monopoly power brought about by the design of the relevant government system and the “passive response” power pricing mechanism. Therefore, on the basis of building a competitive electricity market, it is more important to reform the idea, content, and model of the government's own management of electricity. The current focus should start with the following aspects.

First, enact the energy law as soon as possible and amend and enact new power laws. The second is to collect administrative power, such as power grid planning, standards, and grid access that should have been exercised by the government, to avoid policy vacancies and management “vacuum”, so that the power grid will return to the original role of the enterprise and will no longer assume administrative functions. Really perform duties according to the modern enterprise system. The third is to regulate and supervise the power grid to provide fair and non-discriminatory access to all users and power generation enterprises (including distributed energy sources and self-provided power plants), and formulate new energy, renewable energy, and distributed energy power quality and grid-connected standards for online consumption. Satisfaction and sustainable development provide a good policy environment. The fourth is to create conditions for the gradual liberalization of electricity prices that can be formed by market competition, such as the on-grid price and the sales price of industrial and commercial users, so that the market mechanism can fully play its role. In the transitional period, a price mechanism should be set up for the government to set tariffs that are scientifically reasonable and flexible. Fifth, unified formulation and pre-announcement of power construction planning and access standards for land, environmental protection, and energy efficiency, gradual and orderly release of market access for new power generation projects, simplification of power project approval procedures, enabling project owners to make their own decisions and take risks at their own risk. Avoid vicious competition such as "staking races." Sixth, it distinguishes the power company's production and management and public service responsibilities and implements different assessment methods. The establishment of a government-led new mechanism for the universal service of electricity provides policy and public welfare expenditures such as residents, agricultural production, and preferential use of electricity in remote areas of border areas, which are mainly financed by “pay orders,” gradually reducing cross-subsidies, and dimming subsidies to make up for them.