State Grid focuses on building a new business system of "two-network integration"

State Grid Corporation of China recently issued Document No. 1 of 2020, "Opinions of State Grid Corporation of China on Comprehensively Deepening Reforms and Striving for Breakthroughs" (hereinafter referred to as the "Opinions"), emphasizing the need to thoroughly implement the requirements for clean and low-carbon transformation and development of energy, closely focus on the strategic goal of "three types and two networks, world-class", and build a new "two-network integration" business system as the main axis. We will strive to promote the "three major reform breakthroughs" (mixed ownership reform, group management system changes, and power market construction) and accelerate the construction of a world-class energy Internet company.

The Opinion points out that the main goals of the reform are: by the end of 2020, to promote the implementation of the new "two-network integration" business system, to initially establish the institutional mechanisms to promote the development of new businesses, to comprehensively promote the construction of ubiquitous power Internet of Things and effectively reflect its value; to accelerate the promotion of mixed-ownership reform on a larger scale and at a higher proportion, to achieve breakthroughs in attracting strategic investment, capital and mechanism building, and to present a new situation of win-win cooperation; to promote the accelerated construction of a unified national electricity market and the coordinated operation of the two-level spot market, to effectively play the role of the market in allocating resources on a large scale, to achieve independent and standardized operation of trading institutions, and to gradually improve the company's operating mechanism to adapt to marketization and regulatory requirements.

To this end, the "Opinions" put forward six key tasks, including innovating the "two-network integration" business development system and actively implementing mixed-ownership reform.

Specifically, the Opinions revealed that State Grid will promote the transformation and upgrading of the development mode and management model of power grids, implement precise investment in accordance with the principle of "ensuring safety, improving efficiency and increasing benefits", and promote the transformation of the power grid development mode from scale expansion to stable operation; accelerate the construction of ubiquitous power Internet of Things, promote the construction of energy Internet industrial chain, create a new energy ecology of mutual benefit and win-win, further improve the efficiency of all links in the power system, strengthen the linkage between government and enterprises, and use the construction of new smart cities as a carrier to gather the strength of the whole society to build a ubiquitous power Internet of Things, iteratively build an enterprise middle platform and a smart Internet of Things system; carry out comprehensive demonstration pilot projects to give full play to the value of the ubiquitous power Internet of Things; accelerate the cultivation of emerging industries of "two-network integration", based on strategic emerging industries such as integrated energy services and energy storage, and strengthen technology, management and business model innovation.

In terms of implementing mixed-ownership reform, State Grid will explore the reform of equity diversification of power grid business, further promote the introduction of strategic investment in UHV DC, actively introduce private capital to participate in incremental distribution pilot projects, and continue to promote mixed-ownership reform of pumped storage; vigorously implement market-oriented mixed-ownership reform, and through high-quality strategic investment, system reform, and mechanism building, effectively stimulate corporate vitality, improve efficiency and benefits, vigorously implement mixed-ownership reform of industrial units, achieve complementary advantages, and transform operating mechanisms.

At the same time, in order to promote the construction of a unified national electricity market, the company will accelerate top-level design research, propose construction plans and implementation paths, and promote the optimal allocation of electricity resources across the country; gradually sort out cross-subsidies, further deepen the cross-regional, regional and provincial power grid transmission and distribution price transmission mechanism, and promote the orderly connection between transmission and distribution prices and the electricity market; accelerate the independent and standardized operation of trading institutions, and fully complete the shareholding reform of trading institutions; promote trading institutions to give full play to the platform role, and establish an efficient and coordinated operation mechanism with power grid businesses; establish a new operation and management mechanism that adapts to the electricity market, optimize business processes such as power grid construction, operation and maintenance, and dispatching and operation, and establish a new marketing service model that adapts to the liberalization of the power sales side.

In terms of improving the ability and level of customer service, State Grid will reduce the energy consumption costs of the real economy, implement the national tax and fee reduction policies, promote the improvement of time-of-use electricity price policies, establish a peak load avoidance compensation mechanism, encourage users to actively reduce peak loads and fill valleys, and reduce users' overall energy consumption costs; innovate power supply service models, comprehensively promote sunshine industry expansion, improve information disclosure mechanisms, further optimize electricity application processes, continuously optimize the electricity business environment, and comprehensively promote grid-based comprehensive services; accelerate the development of comprehensive energy services, focus on comprehensive energy efficiency, multi-energy supply, clean energy, emerging energy use and other service areas, and optimize and improve the business development layout.

In addition, State Grid will accelerate the improvement of the modern enterprise system, improve and perfect the company's system; innovate international business development models, and promote the integrated "going out" of investment, construction, and operation; improve the business classification development mechanism, and study and establish a mechanism for effective resource utilization, reasonable cost sharing, and effective business separation. Relying on the construction of "three types and two networks", the digitalization of energy flow and business flow in electricity production, transmission and use will be realized.