Four trends of market-oriented reform of my country's power grid in 2020

Trend 3

Fully liberalize the power generation and consumption plans of commercial power users

The provinces where the power generation and consumption plans of commercial power users are fully liberalized will gradually cover the whole country, and the proportion of electricity market-based transactions will be comprehensively increased. From January to December 2019, the total amount of electricity directly traded in the national power market in the medium and long term was 2177.14 billion kWh, accounting for 30.1% of the total electricity consumption in the society. The total amount of electricity traded by various power trading centers across the country was 283.44 billion kWh. In 2020, affected by the full liberalization of power generation and consumption plans of commercial power users, the amount of electricity directly traded in my country will inevitably increase significantly.

Trend 4: Grid investment efficiency will be improved

In 2020, with the full implementation of the "Measures for Cost Supervision of Transmission and Distribution Pricing", "Measures for Provincial Power Grid Transmission and Distribution Pricing", and "Measures for Regional Power Grid Transmission Pricing", a new round of cost supervision of power grid transmission and distribution prices will be fully launched. The electricity price mechanism will be further streamlined, the efficiency of power grid investment will be improved, and the trend of power grid enterprises returning to their business attributes will be obvious.

Opinions and suggestions on market-oriented reform of my country's power grid

◆Suggestion 1: The reform of the power system is related to the overall economic and social development. The Party Central Committee requires that the reform should be in place while maintaining stability. The decision-making level needs to consider the relationship between the reform of the power system and the reform of state-owned enterprises and the market economy, and give full play to the efficiency of the market economy while taking into account the preservation and appreciation of state-owned assets and national energy security. The progress, rhythm and intensity of the market-oriented reform on the grid side should be properly grasped, and the degree, depth and tolerance of the interest adjustment caused by the reform on market entities should be fully considered.

◆Suggestion 2: Grid companies are important participants in this round of power system reform. Grid companies are encouraged to conduct multi-mode exploration, follow their own path based on actual conditions, maintain reform determination, provide a bottom line for power market reform, ensure power supply security, and safeguard power system reform.

◆Suggestion 3: Further align the thoughts and understandings of all parties involved in the power market with the central spirit. Vigorously publicize the vivid practices of reforms in various places, encourage exploration and innovation, promote advanced models, allow trial and error, tolerate failure, encourage reformers, praise practitioners, and create a good atmosphere conducive to power system reform in the whole society.

(Data sources: National Development and Reform Commission, National Energy Administration, China Power Media Data Research and Development Center, Development and Reform Commissions, Economic and Information Commissions of provinces, autonomous regions, and municipalities directly under the Central Government, etc.)