Is Guangdong ready for the year-round spot?
2022-02-18
Core reading
After all businesses enter the market, the total scale of Guangdong power market will increase to 550 billion kwh in 2022. At the same time, Guangdong power market has changed from "price difference model" to "absolute price model". In August last year and may this year, the problems encountered during the settlement and trial operation of Guangdong spot market have attracted much attention next year.
"In principle, since January 1, 2022, the southern (starting from Guangdong) power spot market has entered the annual continuous settlement and trial operation." According to the notice on matters related to power market transactions in 2022 (hereinafter referred to as the notice) recently issued by Guangdong Provincial Energy Administration and the southern regulatory bureau of the national energy administration.
In short, the spot market forms an electricity price every 15 minutes. The electricity prices are different in different places and different periods, which can reflect the time and location characteristics of electricity commodity prices. Electricity is restored to commodities. Therefore, there is a consensus in the industry that "there is no spot market".
In 2018, the southern power spot market (starting from Guangdong) took the lead in launching the settlement trial operation in China. After daily settlement, weekly settlement, monthly settlement and long-term settlement, the Guangdong power spot market opened the settlement trial operation for the whole year, laying the foundation for the formal operation. After the "storm test" of serious upside down of wholesale and retail sales and sharp rise in fuel prices this year, how can Guangdong power spot market adapt to the new changes?
Large increase in market users and changes in trading rules
This year's Guangdong power market is surging. Due to the sharp fluctuation of fuel prices and the restrictions of trading rules, the market construction has suffered a lot of tests. Taking this as an example, the notice has changed a lot.
According to the "Guangdong 2022 power market transaction arrangement plan (Draft for comments)" released earlier by the Guangdong Provincial Energy Bureau and the southern regulatory bureau of the national energy administration, the proposed transaction scale of Guangdong power market is 34 million KW. The notice shows that after all industries and businesses enter the market, the total scale of Guangdong power market will increase to 550 billion kwh in 2022. According to the statistics of the staff of Guangdong electric power trading center, there were about 30000 market users and about 4.8 million new industrial and commercial users in Guangdong Province, resulting in a significant increase in total annual power consumption.
Another significant change of the notice is that Guangdong power market has changed from "price difference mode" to "absolute price mode". Insiders pointed out that under the "price difference" mode, the catalogue sales price of the corresponding user will be reduced by how much yuan / kWh the power generation enterprise will make on the basis of the national approved price. This has not changed the profit model of unified purchase and marketing of power grid companies. The power generation side is limited by buy it now price and falls into the "zero sum game" of price difference with power sales companies.
The staff of the above-mentioned Guangdong Power Trading Center said that under the absolute price mode, the power grid company changed from the unified purchase and marketing mode to the collection, transmission and distribution price mode, which restored the commodity attribute of power and formed a good connection with the time of use price policy.
In addition, Zhang Ji, chief Trading Officer of zhongjianeng, pointed out that relevant government departments have improved and made up for many rule loopholes. "The notice stipulates that retail contracts with different cycles are allowed to be signed, and one-time price linkage clauses such as coal and gas are encouraged to be added, which significantly improves the market liquidity."
Strengthen market supervision and cultivate market subjects
The maturity of market players is a sufficient and necessary condition for participating in the market. In the face of the recent overwhelmed policy documents, many users admitted to reporters that they "can't understand" and "are digesting the explosive information".
Insiders pointed out that users are used to the "extensive" price reduction contract, forming the party a thinking of "you get preferential treatment on the wholesale side, you must reduce the price on the retail side", and even regard the price reduction as a policy subsidy. After the national development and Reform Commission issued the notice on further deepening the market-oriented reform of on grid electricity price for coal-fired power generation (fgjg [2021] No. 1439), electricity has been restored to commodities, and users need to adapt and be guided scientifically.
Jiang Mou of Guangdong power sales company pointed out that the development of power market needs the common progress of all participants. "In the past, users really knew little about the market, didn't know at all, didn't pay attention to the relevant situation of the power market, and even didn't manage their own account in person, so they paid little attention to the settlement of electricity charges. These situations are business management risks for enterprises. If they continue to do so next year, they will have to 'suffer losses and pay tuition fees'."
If "Xiaobai" users who have just entered the market are "freshmen", then "senior students" such as power generation enterprises and power sales companies who have been "struggling" in the power market for many years also need "make-up lessons". Zhang Ji pointed out that no matter power generation enterprises or power sales companies, enterprises that adapt to the new market situation as soon as possible will occupy a favorable position in the competition; Market players with insufficient service capacity, trading technology and risk awareness will be gradually eliminated by the market.
In addition to both ends of the sale and users, the power grid companies and competent departments as "pipeline providers" have more responsibilities. Zhang Ji pointed out that the competent authorities should urge power grid enterprises to disclose market information in time and help market subjects make correct decisions. Jiang further pointed out that after the implementation of the spot market, the market becomes more complex and professional, and needs more in-depth and detailed supervision. We should severely crack down on and punish unfair acts that destroy the market, ensure that the power market finds the real price signal, realize the optimal allocation of resources, eliminate excess resources, and encourage scarce resources to increase investment.
Improve and straighten out market relations while operating
The notice specifies that the spot implementation scheme and market transaction rules shall be revised on a rolling basis as needed to improve the technical support system in the way of "operation and improvement". So, what will be the revision of Guangdong power market next year?
The reporter learned that in August last year and may this year, during the settlement and trial operation of Guangdong spot market, billions of yuan of high "blocking fees" were generated. How to dredge them has attracted much attention. Insiders pointed out: "At the initial stage of the construction of the spot market, each pilot area will gradually release the development of power consumption plans to realize the smooth transition of market construction. Therefore, the plan and the market will coexist for a long time. Under this background, the settlement of power generation and consumption between the plan and the market will generate unbalanced funds. In addition, the unbalanced funds also include the deviation costs caused by factors such as blocking surplus and cost compensation. Industrial and commercial users enter the market . new energy users will gradually enter the market, and the amount of this fee will be reduced, but the annual operation still needs to be properly handled. "
The staff of Guangdong Power Trading Center pointed out that the construction of power market needs to adapt to the large-scale access of new energy. "With the rapid development of new energy in Guangdong Province, it is urgent to further improve the market-oriented trading mechanism of new energy participation, use the market mechanism to guide the consumption and utilization of new energy, and promote the clean and low-carbon transformation of power structure."
The above industry insiders pointed out that new energy access will increase the cost of the whole power system. In order to adapt to the intermittence of new energy, it is necessary to provide flexible services by using traditional power supply, energy storage and pumped storage. These power supply types are the "main force" of auxiliary service market, and their construction and operation need funds. "At present, the relationship between the spot market and the auxiliary service market has not been straightened out, which may expose many contradictions in the future operation, which is also an urgent need to be repaired. In addition, new 'equipment' such as capacity market, financial transmission right and power futures also need to be equipped."
The staff of Guangdong power trading center further pointed out that the construction of power market should be well connected with carbon market, green card market and other mechanisms. "At this stage, various markets operate separately, with overlapping functions and insufficient role. It is necessary to promote the organic integration, unified and coordinated development of multiple markets and jointly play the role of carbon reduction."
After all businesses enter the market, the total scale of Guangdong power market will increase to 550 billion kwh in 2022. At the same time, Guangdong power market has changed from "price difference model" to "absolute price model". In August last year and may this year, the problems encountered during the settlement and trial operation of Guangdong spot market have attracted much attention next year.
"In principle, since January 1, 2022, the southern (starting from Guangdong) power spot market has entered the annual continuous settlement and trial operation." According to the notice on matters related to power market transactions in 2022 (hereinafter referred to as the notice) recently issued by Guangdong Provincial Energy Administration and the southern regulatory bureau of the national energy administration.
In short, the spot market forms an electricity price every 15 minutes. The electricity prices are different in different places and different periods, which can reflect the time and location characteristics of electricity commodity prices. Electricity is restored to commodities. Therefore, there is a consensus in the industry that "there is no spot market".
In 2018, the southern power spot market (starting from Guangdong) took the lead in launching the settlement trial operation in China. After daily settlement, weekly settlement, monthly settlement and long-term settlement, the Guangdong power spot market opened the settlement trial operation for the whole year, laying the foundation for the formal operation. After the "storm test" of serious upside down of wholesale and retail sales and sharp rise in fuel prices this year, how can Guangdong power spot market adapt to the new changes?
Large increase in market users and changes in trading rules
This year's Guangdong power market is surging. Due to the sharp fluctuation of fuel prices and the restrictions of trading rules, the market construction has suffered a lot of tests. Taking this as an example, the notice has changed a lot.
According to the "Guangdong 2022 power market transaction arrangement plan (Draft for comments)" released earlier by the Guangdong Provincial Energy Bureau and the southern regulatory bureau of the national energy administration, the proposed transaction scale of Guangdong power market is 34 million KW. The notice shows that after all industries and businesses enter the market, the total scale of Guangdong power market will increase to 550 billion kwh in 2022. According to the statistics of the staff of Guangdong electric power trading center, there were about 30000 market users and about 4.8 million new industrial and commercial users in Guangdong Province, resulting in a significant increase in total annual power consumption.
Another significant change of the notice is that Guangdong power market has changed from "price difference mode" to "absolute price mode". Insiders pointed out that under the "price difference" mode, the catalogue sales price of the corresponding user will be reduced by how much yuan / kWh the power generation enterprise will make on the basis of the national approved price. This has not changed the profit model of unified purchase and marketing of power grid companies. The power generation side is limited by buy it now price and falls into the "zero sum game" of price difference with power sales companies.
The staff of the above-mentioned Guangdong Power Trading Center said that under the absolute price mode, the power grid company changed from the unified purchase and marketing mode to the collection, transmission and distribution price mode, which restored the commodity attribute of power and formed a good connection with the time of use price policy.
In addition, Zhang Ji, chief Trading Officer of zhongjianeng, pointed out that relevant government departments have improved and made up for many rule loopholes. "The notice stipulates that retail contracts with different cycles are allowed to be signed, and one-time price linkage clauses such as coal and gas are encouraged to be added, which significantly improves the market liquidity."
Strengthen market supervision and cultivate market subjects
The maturity of market players is a sufficient and necessary condition for participating in the market. In the face of the recent overwhelmed policy documents, many users admitted to reporters that they "can't understand" and "are digesting the explosive information".
Insiders pointed out that users are used to the "extensive" price reduction contract, forming the party a thinking of "you get preferential treatment on the wholesale side, you must reduce the price on the retail side", and even regard the price reduction as a policy subsidy. After the national development and Reform Commission issued the notice on further deepening the market-oriented reform of on grid electricity price for coal-fired power generation (fgjg [2021] No. 1439), electricity has been restored to commodities, and users need to adapt and be guided scientifically.
Jiang Mou of Guangdong power sales company pointed out that the development of power market needs the common progress of all participants. "In the past, users really knew little about the market, didn't know at all, didn't pay attention to the relevant situation of the power market, and even didn't manage their own account in person, so they paid little attention to the settlement of electricity charges. These situations are business management risks for enterprises. If they continue to do so next year, they will have to 'suffer losses and pay tuition fees'."
If "Xiaobai" users who have just entered the market are "freshmen", then "senior students" such as power generation enterprises and power sales companies who have been "struggling" in the power market for many years also need "make-up lessons". Zhang Ji pointed out that no matter power generation enterprises or power sales companies, enterprises that adapt to the new market situation as soon as possible will occupy a favorable position in the competition; Market players with insufficient service capacity, trading technology and risk awareness will be gradually eliminated by the market.
In addition to both ends of the sale and users, the power grid companies and competent departments as "pipeline providers" have more responsibilities. Zhang Ji pointed out that the competent authorities should urge power grid enterprises to disclose market information in time and help market subjects make correct decisions. Jiang further pointed out that after the implementation of the spot market, the market becomes more complex and professional, and needs more in-depth and detailed supervision. We should severely crack down on and punish unfair acts that destroy the market, ensure that the power market finds the real price signal, realize the optimal allocation of resources, eliminate excess resources, and encourage scarce resources to increase investment.
Improve and straighten out market relations while operating
The notice specifies that the spot implementation scheme and market transaction rules shall be revised on a rolling basis as needed to improve the technical support system in the way of "operation and improvement". So, what will be the revision of Guangdong power market next year?
The reporter learned that in August last year and may this year, during the settlement and trial operation of Guangdong spot market, billions of yuan of high "blocking fees" were generated. How to dredge them has attracted much attention. Insiders pointed out: "At the initial stage of the construction of the spot market, each pilot area will gradually release the development of power consumption plans to realize the smooth transition of market construction. Therefore, the plan and the market will coexist for a long time. Under this background, the settlement of power generation and consumption between the plan and the market will generate unbalanced funds. In addition, the unbalanced funds also include the deviation costs caused by factors such as blocking surplus and cost compensation. Industrial and commercial users enter the market . new energy users will gradually enter the market, and the amount of this fee will be reduced, but the annual operation still needs to be properly handled. "
The staff of Guangdong Power Trading Center pointed out that the construction of power market needs to adapt to the large-scale access of new energy. "With the rapid development of new energy in Guangdong Province, it is urgent to further improve the market-oriented trading mechanism of new energy participation, use the market mechanism to guide the consumption and utilization of new energy, and promote the clean and low-carbon transformation of power structure."
The above industry insiders pointed out that new energy access will increase the cost of the whole power system. In order to adapt to the intermittence of new energy, it is necessary to provide flexible services by using traditional power supply, energy storage and pumped storage. These power supply types are the "main force" of auxiliary service market, and their construction and operation need funds. "At present, the relationship between the spot market and the auxiliary service market has not been straightened out, which may expose many contradictions in the future operation, which is also an urgent need to be repaired. In addition, new 'equipment' such as capacity market, financial transmission right and power futures also need to be equipped."
The staff of Guangdong power trading center further pointed out that the construction of power market should be well connected with carbon market, green card market and other mechanisms. "At this stage, various markets operate separately, with overlapping functions and insufficient role. It is necessary to promote the organic integration, unified and coordinated development of multiple markets and jointly play the role of carbon reduction."