Thoughts on issues related to power development in the 14th Five-Year Plan

Thoughts on issues related to power development in the 14th Five-Year Plan

Yang Kun

(Secretary of the Party Committee and Executive Vice Chairman of China Electricity Council)

The new energy security strategy of "four revolutions and one cooperation" is a concrete manifestation of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in the field of energy, and provides a fundamental guideline for the high-quality development of energy and electricity. During the 13th Five-Year Plan period, my country's power industry overcame difficulties and continued to innovate, achieving a huge leap forward and meeting the power needs of economic and social development. The development of the power industry has shown new characteristics, laying the foundation for the high-quality development of the power industry. The 14th Five-Year Plan is a critical period for my country to move from building a well-off society in an all-round way to basically realizing socialist modernization. The formulation and implementation of the 14th Five-Year Plan is of great significance.

1. The development of the power industry presents new characteristics

The structure of power generation capacity continues to develop towards clean and low-carbon. On the one hand, the development of non-fossil energy has entered a large-scale "incremental substitution" stage. In 2018, half of the world's new non-fossil energy installed capacity was in China. By the end of 2018, non-fossil energy power generation capacity reached 770 million kilowatts, accounting for 40.8% of the total installed capacity; power generation was 2.16 trillion kilowatt-hours, accounting for 30.9% of the total power generation, an increase of 6 percentage points and 3.7 percentage points respectively compared with 2015. On the other hand, the proportion of large-capacity, high-parameter, energy-saving and environmentally friendly thermal power units in my country has increased significantly. By the end of 2018, the proportion of thermal power units with a capacity of 600,000 kilowatts and above in the country was 44.8%; efforts to save energy and reduce emissions were further strengthened. By the end of 2018, the number of coal-fired power units that met ultra-low emission limits was about 810 million kilowatts, and the emissions of sulfur dioxide, nitrogen oxides and smoke per unit of thermal power generation were reduced to 0.20 grams, 0.19 grams and 0.04 grams respectively, promoting the release of high-quality coal-fired power production capacity; the efficiency of coal-fired power generation has been greatly improved, and the average coal consumption of thermal power generation has been reduced to 308 grams/kilowatt-hour, a decrease of 60 grams/kilowatt-hour compared with 2006, a decrease of 16%.

The electrification level of terminal energy consumption continues to improve. In 2018, the proportion of electricity in terminal energy consumption reached 25.5%, an increase of 4.2 percentage points from 2010; from 2016 to 2018, a total of 392.3 billion kWh of electricity was replaced, and it is showing an upward trend year by year. With the continuous increase in the implementation of electric energy substitution, the electrification level of key areas such as industrial production and manufacturing, transportation, residents' lives, and construction has steadily improved. In particular, with the rapid development of electric vehicles, the electrification of the transportation field will be accelerated in an all-round way.

Digital and intelligent technologies are gradually integrated into the power system, and the flexibility of the system is constantly enhanced. Power companies are actively promoting the integration of new generation information technology and digital technology achievements with the industry. Among the first batch of 55 energy Internet demonstration projects in the country, 14 projects have passed acceptance; State Grid Corporation of China proposed to build a "ubiquitous power Internet of Things", actively explored in the ubiquitous dispatching and control of source, grid, load and storage, online business handling, modern smart supply chain, and comprehensive demonstration zone construction, and achieved outstanding results; power generation companies actively promoted the flexibility transformation of coal-fired power, and the minimum technical output of the 2×350,000-kilowatt units of Huaneng Dandong Power Plant reached 20%, and the minimum technical output of the 2×600,000-kilowatt units of the State Energy Group Zhuanghe Power Plant reached 30%, reaching the international advanced level; since the implementation of power demand side management in the industrial field in 2016, a total of 30 million kilowatts of power investment has been saved, more than 4 million kilowatts of peak loads in summer and winter have been transferred, and the electricity costs of enterprises have been reduced by more than 150 billion yuan.

International cooperation in energy and power is an important foundation and support for the Belt and Road Initiative. my country's investment and trade in energy and power infrastructure with countries along the route are on the rise. From 2013 to 2018, my country's major power companies participated in the Belt and Road international cooperation and completed a total investment of US$10.7 billion, signed 622 power engineering contracts with a total amount of US$116.7 billion; various power companies continue to promote the establishment of an international capacity cooperation model of "going out" in all aspects of technology, standards, equipment, and management; the concept of global energy Internet has been widely recognized and has been included in the Belt and Road construction, the United Nations "2030 Agenda" and the framework for promoting the implementation of the Paris Agreement, proposing solutions to promote the coordinated development of international energy and power and the economic, social and environmental environment; China-Pakistan Economic Corridor power cooperation is becoming increasingly close, the level of cooperation between China and ASEAN countries is constantly improving, and China-Russia and China-Northeast Asia international power capacity cooperation is steadily advancing.

The reform of the power system has been steadily and solidly advanced. The proportion of market-based transactions has increased significantly. In the first 10 months of 2019, the national market transaction volume reached 2.2 trillion kWh, a year-on-year increase of 30%; more than 100,000 market entities have been registered in 31 power trading institutions across the country; all eight pilot projects in the power spot market have started settlement trial operation; the reform of incremental distribution business has been accelerated. Among the approved pilot projects, more than 40% of the projects have established owners, and more than 60 pilot projects have been put into operation; in the reform of electricity prices, the cost supervision of the second regulatory cycle of transmission and distribution prices has been launched, and problems in the electricity price mechanism such as cross subsidies have begun to be gradually cleared.

II. Understanding of issues related to power development in the 14th Five-Year Plan

Electricity demand has a large room for growth. my country's economy is generally in the middle and late stages of industrialization and the rapid advancement of urbanization, which determines the continued rigid growth of electricity demand. The transformation of energy production and consumption methods centered on electricity is an inevitable requirement for the development of clean energy and the inevitable result of clean substitution, which determines that my country's electricity demand is still in a long period of growth and has a large room for growth. The main factors affecting the growth rate of electricity demand in the "14th Five-Year Plan" are the following five aspects: First, the conversion of old and new kinetic energy, the growth rate of traditional electricity-consuming industries has declined, and high-tech and equipment manufacturing and modern service industries will become the main driving force for electricity growth; second, the construction of new urbanization will promote the rigid growth of electricity demand. In the future, the proportion of electricity consumption in the western region will increase, and the eastern and central regions will still be the center of gravity of my country's electricity load; third, energy transformation and development, showing an obvious electrification trend, huge potential for electricity substitution; fourth, the in-depth promotion of the energy consumption revolution, industrial structure upgrading and technological innovation drive and many other factors will inhibit the growth of electricity consumption to a certain extent; fifth, the implementation of the ubiquitous power Internet of Things strategy can achieve a load growth rate lower than the electricity growth rate in terms of power demand response management, bringing huge economic and social benefits.

Using a variety of forecasting methods such as the unit consumption method of output value, the power elasticity coefficient method, and the per capita power consumption method, we analyzed and forecasted my country's medium- and long-term power demand. It is estimated that my country's total social power consumption will reach 9.2 to 9.5 trillion kWh in 2025, with an average annual growth rate of about 4.0% to 4.5% during the 14th Five-Year Plan period. The total social power consumption will be around 12 trillion kWh in 2035, with an average annual growth rate of about 3% from 2020 to 2035, gradually transitioning to a saturated stage of power consumption growth.

The clean and low-carbon level of the power structure has been further improved. Taking into account the economic and social development of various regions in my country, the power consumption structure, and demand-side management, and based on the maturity of energy storage technology, it is estimated that the total installed capacity of power sources will reach 2.7 billion kilowatts in 2025, with non-fossil energy power generation accounting for 48% and non-fossil energy power generation accounting for 37%. In 2035, the installed capacity of power sources will reach 3.8 billion kilowatts, and non-fossil energy power generation will surpass fossil energy in all aspects.