my country's first electricity spot transaction settlement was implemented in the Southern Market

The author learned from the State Grid Corporation of China that on May 20, the southern (starting in Guangdong) electricity spot market released the results of the first domestic electricity spot transaction settlement. All market entities in Guangdong, including 190 power plant units, 123 power sales companies, and 3 large users, participated in this settlement. During this period, the operation of the spot market and the power system remained stable and orderly.

The average node electricity price for the first electricity spot transaction settlement was 0.263 yuan/kWh

"The average node electricity price for users is 0.263 yuan/kWh, the average node electricity price during the night valley period is 0.082 yuan/kWh, and the average node electricity price during the peak load period is 0.362 yuan/kWh." At the spot trading seat of the Guangdong Electric Power Dispatching and Control Center of the Southern Power Grid, the first spot electricity price in the country was formed here. This settlement selected May 15 and May 16 as the settlement operation days, May 14 and May 15 as the transaction declaration days, and May 20 as the settlement result announcement day. The power generators independently declare the amount of electricity and price to be sold, and the power purchasers independently declare the amount of electricity to be purchased. After the trading platform bids and matches, and passes the power grid operation safety inspection, an electricity price is formed every 15 minutes, and the electricity prices are different in different places and different time periods. How much electricity the power generator generates at what price and at what price the user purchases electricity are determined by the "invisible hand" of the market in accordance with market laws.

"Assisting the government in improving the electricity market system and building an efficient electricity spot market is an important measure for the State Grid Corporation of China to implement the decisions and arrangements of the CPC Central Committee and the State Council on deepening electricity system reform." Cao Zhian, general manager of the State Grid Corporation of China, said that the first settlement operation is an important milestone in the construction of the spot market. It will be beneficial for market players to discover electricity prices through market mechanisms, and reflect the actual market demand, supply capacity, supply and demand changes and supply and demand trends more quickly and accurately, give play to the decisive role of the market in resource allocation, realize the optimal allocation of resources in time and space, and release the dividends of reform and enhance the ability to absorb clean energy in a market-oriented way.

Spot trading allows the market to better allocate resources

Huaxing Optoelectronics, a major user in Shenzhen, is a semiconductor display technology company that consumes 2 billion kWh of electricity a year. Xu Xiaodong, director of the company's environmental safety department, said that the company used to pay more than 50 cents per kWh of electricity, with an annual electricity bill of nearly 1 billion yuan. According to the spot market, the average price of one kWh of electricity can be reduced by 4 to 5 cents, which can save a lot of costs.

In the past, each enterprise had one electricity meter and received an electricity bill once a month. Now, a company has 96 electricity prices per day. This dynamic time-of-use electricity price has stimulated the potential for user interaction, realized the interaction between source, grid and load on a time scale, laid a foundation for refined user demand-side management, and guided the customer's peak-shaving and valley-filling friendly electricity consumption method with price signals.

Liang Chao, general manager of Guangdong Yuehua Power Generation Company, said, "We used to arrange the start and stop of power generation according to the power generation plan, but now we actively participate in the market by quoting and reporting the quantity. This change has prompted us to study where the real load is and pay more attention to the market and users. It also prompted us to make more scientific investment decisions and operation control. From the perspective of the whole society, we can make better use of and allocate resources."

In the thermal power industry, power plants with different energy consumption compete on the spot market, and power plants with low energy consumption and low cost will have more advantages. On the one hand, users can buy electricity at a lower price, and on the other hand, power plants will be forced to continuously reduce costs and increase efficiency, save energy and reduce consumption, and promote low-carbon emission reduction in the whole society.

Professor Xia Qing of Tsinghua University, a well-known expert who has long participated in my country's electricity market reform, said that from the perspective of mature international electricity markets, the electricity spot market is the most important link in electricity price discovery and optimal resource allocation. The function of the spot market is to allow time-based and location-based price signals to more fully reflect the electricity supply and demand situation and achieve optimal allocation of electricity resources in time and space. "The purpose of spot market construction cannot be simply considered to lower electricity prices, but to let prices reflect the supply and demand relationship of electricity in time and space. The spot market reflects the supply and demand relationship of the electricity market, which has changed the previous medium- and long-term transactions that only considered electricity balance, reconstructed the medium- and long-term electricity trading system, and will greatly reduce the cost paid by society for electricity balance. By cultivating users' scientific and friendly energy usage habits, we can obtain long-term reform dividends such as reducing social energy consumption levels, improving asset utilization efficiency, and increasing new energy absorption capacity."

The construction of the power spot market in the south (starting from Guangdong) is at the forefront of the country

Chen Ye, deputy general manager of Guangdong Power Grid Company of China Southern Power Grid, introduced that the construction of the spot market is a reconstruction of economic relations and also a system reform. Factors such as the safety and complexity of the power system and the variability of the market determine the difficulty of construction. There is still a lot of preparatory work to be done before the spot market is officially put into operation. It is necessary to better play the role of the market under the premise of ensuring the safe and stable operation of the power system and reliable power supply, gradually increase the number of days for settlement at spot prices, encourage and guide market players to participate in the construction of the spot market more actively and rationally, scientifically guide investment and consumption, improve the economy of the power system, and promote energy conservation and emission reduction.

It is understood that the Southern Power Spot Market (starting from Guangdong) is the only regional spot market among the eight spot market pilots in the country. The first settlement operation will lay an important foundation for the subsequent construction of the Southern Regional Power Market. The Southern Power Grid Company will carefully summarize the experience of the Guangdong Power Spot Market and accelerate the construction of the Southern Regional Power Spot Market in accordance with the principle of "unified rules and unified platform".

Background Links

In 2015, under the guidance of the National Development and Reform Commission, the National Energy Administration, and the Guangdong Provincial Party Committee and Government, the Southern Power Grid launched a study on electricity spot market and became one of the first eight pilot areas. After more than three years of reform and development, relevant parties and market players have reached an important consensus, designed a "medium- and long-term + spot" centralized market model that adapts to Guangdong's actual situation, and built my country's first set of technical support system for electricity spot market. In August 2018, the Southern Power Spot Market (starting in Guangdong) was the first in the country to be put into trial operation, which was 2 to 4 years shorter than similar international construction, providing a reference and reference model for the national electricity spot market reform.