The growth of market-based transaction scale slowed down, while the consumption of clean energy increased significantly

With the advancement of power system reform, the scale of market-based electricity transactions in the country continues to expand.

The China Electricity Council recently released the national power market transaction information. In the first two months of this year, the national power trading centers have organized a total of 267.29 billion kWh of market transactions, of which the national power market medium- and long-term direct power transactions totaled 211.79 billion kWh, accounting for 20.8% of the total social electricity consumption. In terms of regions, the proportion of medium- and long-term direct power transactions in the State Grid and Southern Grid regions to the total social electricity consumption in the region was 16.4% and 36.2%, respectively.

The data sources of the following charts are: China Electricity Council, Beijing Power Exchange Center, Guangzhou Power Exchange Center, Guangdong Power Exchange Center, and the official websites of the Development and Reform Commissions of Jiangsu, Guangdong, Zhejiang and other provinces

As shown in Figure 1, from 2017 to 2019, the scale of market-based electricity trading in the country has expanded year by year, but the proportion of market-based electricity trading in the total social electricity consumption has declined. In 2019, the proportion of market-based electricity trading in the total social electricity consumption reached 30.1%, but it was 0.1% lower than in 2018.

Expanding the scale of market-oriented transactions is an important manifestation of the achievements of the new round of power system reform and plays an important role in reducing users' electricity costs.

At the State Council executive meeting held in January this year, it was pointed out that it is necessary to continue to implement tax and fee reduction measures focusing on the manufacturing industry, promote the reduction of manufacturing electricity costs and corporate telecommunications charges, and fully open up industrial enterprises above a certain scale to participate in electricity market transactions. Some experts believe that in the current situation of excess electricity, expanding the scale of market-based transactions will further reduce corporate energy costs.

Information released by the National Development and Reform Commission shows that in 2017, based on the calculation of an additional 400 billion cubic meters of market-based electricity and an average reduction of about 4.5 cents per kilowatt-hour, promoting the marketization of electricity prices in competitive links saved users about 18 billion yuan in electricity bills.

In the medium- and long-term transactions in the national power market, the proportion of electricity directly traded within the province is relatively high, while the proportion of electricity directly traded between provinces (external receipt) is relatively low. As shown in Figure 2, in 2019, the proportion of electricity directly traded between provinces in the market was 6.8%, a significant decrease compared to 16.8% in 2018.

As of now, some provinces (autonomous regions and municipalities) have announced the scale of electricity market transactions in 2020, as shown in Figure 3. Among them, Jiangsu, Guangdong and Zhejiang ranked the top three with 315 billion kWh, 260 billion kWh and 200 billion kWh respectively.

The above three provinces are also accelerating the pace of market-oriented reform of electricity. Jiangsu proposed to expand the scope of optimal resource allocation, improve the market trading mechanism, and establish a spot electricity market trading system in 2020; after 2021, it will further liberalize the priority power generation and priority power purchase plans, improve auxiliary services and spot trading mechanisms, enrich trading varieties, and promote the self-development and improvement of the market.

Zhejiang plans to officially launch the trial operation of uninterrupted settlement in the electricity spot market in 2020, and then fully release the power consumption plan in 1-2 years. The first full-month settlement trial operation of the Guangdong electricity spot market is progressing steadily.

As shown in Figure 4, in terms of the scale of medium- and long-term direct electricity trading in 2019, Jiangsu, Guangdong and Shandong ranked the top three respectively, while the non-medium- and long-term direct trading electricity in Guangdong and Shandong was much higher than that in Jiangsu.

As shown in Figure 5, Yunnan has the highest proportion of medium- and long-term direct electricity trading in the total social electricity consumption, accounting for 57.7%. Western Inner Mongolia, Jiangsu and Qinghai account for nearly 50%.

In the cross-regional and cross-provincial electricity market, the amount of electricity directly traded between provinces has grown rapidly, as shown in Figure 7, reaching 1,061.9 billion kWh in 2019.

Since my country's electricity consumption is mainly concentrated in the central and eastern regions, and clean energy resources are distributed in the west and north, cross-regional and cross-provincial electricity trading is crucial to promoting the large-scale consumption of renewable energy.

As shown in Figure 7, data from the Beijing Power Exchange Center shows that in 2019, wind power and photovoltaic power transmission reached 88 billion kWh, a year-on-year increase of 22.6%, accounting for 19% of the inter-provincial clean energy consumption. This has alleviated the wind and photovoltaic power abandonment rates to a certain extent. In 2019, the national wind and photovoltaic abandonment rates were 4% and 2%, respectively, down 3% and 1% year-on-year.