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Power planning should be rooted in market-oriented thinking

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Power planning should be rooted in market-oriented thinking

"'Plan birth, market nursing' has been difficult to sustain, 'sequelations' obvious" "If you follow the plan model, will produce incalculable stranded assets" "The power industry is not what it used to be, with the plan model planning has been unable to meet the development needs" ...... Recently, many industry insiders admitted to reporters, "power planning is in urgent need of marketization".

Issued in 2015 by the CPC Central Committee and the State Council on Further Deepeningelectric power system reformSeveral opinions (Zhongfa [2015] No. 9) mentioned the problem of "the transformation of government functions is not in place, and various planning coordination mechanisms are not perfect", and bluntly stated that "between various special development plans, power planning and It is difficult to effectively coordinate between energy planning, national planning and provincial planning, and the actual implementation of power planning and planning deviation are too large."

In the past 20 years, from planning to planning, and then to market price signal guidance, power planning has been guiding the vigorous development of China's power industry. Under the carbon peak carbon neutral target, the power industry "scenery water and fire storage integration" base construction is in the ascendant, DC AC transmission channel road. What kind of power planning can realize the maximization of investment efficiency? The industry will "key" to the market.

"Double carbon" puts forward new requirements for power planning

At present, the development of China's electric power industry has gone through 13 "five-year" plans, during which only two national electric power plans have been issued-"Tenth Five-Year Plan for Electric Power Industry" and "Thirteenth Five-Year Plan for Electric Power Development (2016-2020)", which were issued in 2001 and 2016 respectively.

The two plans are 15 years apart, why? In the view of Feng Yongsheng, an associate researcher at the Institute of Financial Strategy of the Chinese Academy of Social Sciences, the fundamental reason is that the power planning relying on the planning model is increasingly unable to meet the needs of the high-quality development of the power industry.

Now, carbon peak carbon neutral target and put forward new requirements for power planning. At the beginning of this year, the National Development and Reform Commission and the National Energy Administration on accelerating the construction of national unityelectricity marketThe guidance of the system (Development and Reform Commission [2022] No. 118) was first proposed, focusing on the guiding role of market price signals in power planning and construction.

Why does power planning also need to be market-oriented? Some relevant staff of power generation enterprises told reporters that the current power supply is driven by many factors, such as the power supply project in the planning stage is no longer determined to go online.Electricity PriceThe "survival soil" of the power industry has undergone earth-shaking changes, such as changes in the profit model of power supply, changes in the scope of variable costs due to the development of new energy sources, and changes in the construction of new power systems.

"In contrast, the power planning under the planning model is 'managed and nurture', with government arrangements for early project approval and later electricity prices and power consumption, and users have no choice under the unified purchase and marketing model. In contrast, power planning under the market model is 'managed and nurture', with volume and price determined by the market and unable to force users to accept electricity prices." The above-mentioned power generation enterprise staff said.

The malpractice of "planned birth, market support" is becoming more and more obvious.

"Planning, market support" to bring what "sequelae"? In the interview, the reporter learned that under the planning system, power planning "absence" "lag" and other evaluations are endless, often in the "water more surface, surface more water" state, the power industry sequelae is obvious, which is difficult to avoid the problem is the treatment of stranded costs.

The so-called "stranded cost" refers to the cost that the power enterprise is allowed to recover under the original control system, but cannot recover due to the change of the system.

Under the planning model, power generation companies would invest according to the then-current regulated electricity prices, and it was only a matter of time before they returned to their capital. However, if you enter the spot market, the economics of the generator set will be clear at a glance. If it is difficult to recover costs due to objective factors, stranded assets will be formed." Mr. Xiao, a practitioner in the power industry, explained to reporters.

The same is true for trans-provincial trans-district transmission lines. "If the transmission line fully enters the market, its utilization hours will decrease, indicating that the line is not economical, which just proves the shortcomings of the plan." Mr. Xiao said frankly that the current difficulty in entering the market across provinces and regions is not unrelated to this. Whether the transmission lines planned and constructed under the planned mode can withstand the market test is "doubtful".

So, how to deal with the current stranded cost?

An unnamed interviewee told reporters bluntly: "The power industry mostly adopts the way of pushing up user-side electricity prices, and the relevant departments generally avoid talking about it, but the missing link has precisely become a 'stumbling block' to the reform of the electricity market. If the planning model continues to be used in the future, it will produce more incalculable stranded costs, which in turn will cause greater obstacles to the construction of the electricity market."

"The current trend of 'distribution according to the trouble 'is gradually showing. If the loss of money, the government should not care? If so, the financial can afford it? But if not, and can not reflect the fair, after all, are in accordance with the planning and production. The solution is very simple, it should be decided by the market, to achieve independent decision-making, self-financing." Another interviewed power industry practitioners told reporters.

Planning reform and regulatory strengthening must pay equal attention

How should electric power planning be marketized? "The reform of electric power planning should serve the construction of electric power market." Feng Yongsheng suggested that we should first focus on solving the problems arising from the traditional planning resource allocation mechanism, but not replace the traditional planning means with a new planning means. "Power planning should be conducive to the implementation of the power market to play a decisive role in the allocation of power resources."

The marketization of power planning is the inherent requirement of the transformation of government functions. "after the visible hand of the government withdraws from the field of direct resource allocation, it is necessary to strengthen macro-control, but to avoid the degradation of planning into a plan, so it is necessary to pay equal attention to improving planning and strengthening supervision, so that the government can play a better role." Feng Yongsheng said.

"For example, a capacity cost recovery mechanism should be established as soon as possible and included in the evaluation of the planning plan." The person in charge of the above-mentioned power generation enterprises pointed out that the lack of a reasonable capacity cost recovery mechanism will increase the risk of power generation investment, it is difficult to encourage market entities to invest in power projects that can provide effective capacity, and in the long run, it is impossible to guarantee the adequacy of the effective capacity of the system, which will affect the safe and stable operation of the power system.

At the technical level, it is necessary to use power system simulation software for quantitative calculation to provide decision-making basis for power system planning and investment. "In the market environment, power project planning can no longer be predicted simply based on past government pricing and historical power generation. In addition, the profitability model of various types of power supplies is also undergoing fundamental changes, and simulation systems are needed to help plan new (expansion) construction of power supplies and grids more accurately." The person in charge of the above-mentioned power generation enterprises further pointed out.

Article from: Polaris power network