State Grid: Support social capital to participate in incremental power distribution pilot

Recently, in order to resolutely implement the deployment of the Party Central Committee and the State Council on power system reform, support, participate in and promote the reform of incremental distribution, and achieve new breakthroughs in key reform points such as "marketization, transparency, and high efficiency", the Party Committee of State Grid Corporation of China conducted special research and issued opinions on further supporting and promoting the reform of incremental distribution business (hereinafter referred to as the "Opinions"). It will cooperate with governments at all levels to make good use of pilot project applications, provide high-quality and efficient grid-connected services for pilot projects, accelerate the implementation of pilot projects in which the company participates, and support the operation of pilot projects.

So far, a total of 404 pilot projects for incremental power distribution reform have been approved in four batches across the country, basically achieving full coverage of cities and prefectures. As of December 2019, 321 pilot projects (accounting for 80% of the country) were approved in the State Grid's operating area, 154 owners were identified (of which 68 were companies), 122 companies were established, and 63 power business licenses were obtained.

The opinions revealed that State Grid will actively cooperate with the pilot application, scientifically formulate power grid planning, reasonably divide the power distribution areas, and provide good pilot exit guarantee services.

The company will provide the status of the local power system, as well as relevant substation intervals, line channels, open capacity and other planning information in a timely manner as required, and put forward scientific and reasonable planning suggestions to ensure the safety of the large power grid and the coordinated development of the incremental distribution network and the public power grid; encourage the division of pilot areas during the planning stage of the incremental distribution network to promote the smooth progress of reform. For the existing power grid assets in the designated distribution area, State Grid can dispose of them in accordance with the law and regulations through asset equity, sale, property rights replacement, leasing, etc. to ensure the safety of state-owned assets.

In terms of providing high-quality and efficient grid-connected services for pilot projects, State Grid will, based on relevant national and industry standards, promptly study and put forward opinions and suggestions on the access system of the incremental distribution network; in accordance with the principles of "internal transfer but not external transfer" and "one port to the outside", the marketing department of the local company will uniformly accept the grid connection business and organize the signing of grid connection contracts; strengthen the construction of the superior power grid to ensure that it is put into production simultaneously with the pilot project, and ensure that the incremental distribution network is connected to the grid and operated on time; in accordance with the principle of "unified dispatching and hierarchical management", the incremental distribution network will be included in the unified dispatching management to ensure the safe and stable operation of the incremental distribution network.

In order to speed up the implementation of pilot projects in which the company participates, the opinions clearly state that the responsibilities for feasibility study approval and project company establishment of all pilot projects will be delegated to provincial companies; actively support private capital, foreign capital and other social capital to participate in the incremental distribution pilot; optimize the control model of holding projects, establish a management system that is compatible with reform requirements and market-oriented directions, focus on target management and indicator assessment, supplemented by process control, reduce pre-approval links, and improve decision-making efficiency and response speed; on the basis of operating the distribution network, encourage distribution companies to rely on their own advantages to explore market-oriented businesses, innovate businesses, formats and business models, transform and upgrade traditional businesses with new concepts and new technologies, extend and expand value-added services, create a comprehensive energy platform, enhance the profitability of distribution companies, and enhance customers' experience and sense of gain.

In addition, to support the operation of the pilot project, State Grid will promptly provide the electricity quantity, load and other data required for price verification, assist provincial price authorities in scientifically determining distribution prices; provide good electricity bill settlement services; assist in the handover of users in the distribution area; relying on its advantages in technology, management, talents, operations, etc., and based on the principle of voluntary choice by distribution companies, actively provide distribution companies with technical training, project consulting, construction and renovation, operation and maintenance, customer service, capital operation, energy efficiency improvement and other types of outsourced services.