The construction of a "new power system with stronger new energy absorption capacity" was first proposed! The construction of a national unified power market has begun!

China Energy Storage Network News: The National Development and Reform Commission and the National Energy Administration recently issued the "Guiding Opinions on Accelerating the Construction of a National Unified Electricity Market System" (hereinafter referred to as the "Guiding Opinions").

The "Guiding Opinions" propose that by 2025, a unified national electricity market system will be initially established, the national market and provincial (autonomous region, municipality)/regional markets will operate in a coordinated manner, the medium- and long-term electricity, spot, and ancillary service markets will be integrated in design and jointly operated, the market-oriented allocation of resources across provinces and regions and the scale of green electricity transactions will be significantly improved, and market transactions and pricing mechanisms that are conducive to the development of new energy, energy storage, etc. will be initially formed.

By 2030, a unified national electricity market system will be basically established to meet the requirements of the new power system. The national market and provincial (autonomous region, municipality)/regional markets will operate jointly. New energy will fully participate in market transactions. Market players will compete on an equal footing and make independent choices. Electricity resources will be further optimized across the country.

This is the first time that the central government has conducted research and deployment on special power reform tasks since the new round of power system reform in 2015.

Industry insiders believe that the "Guiding Opinions" provide solutions to the deep-seated problems that my country is currently facing in the process of promoting electricity market reform. It will help to coordinate the effective connection of market mechanisms, give full play to the decisive role of market mechanisms in price formation, price transmission and resource allocation, and better clarify the relationship between the market and the government.

Orderly promote cross-provincial and cross-regional market opening and cooperation

At present, cross-provincial and cross-regional transactions are mainly organized by the Beijing and Guangzhou Power Exchanges. The electricity volume and electricity price are basically determined in accordance with national plans and intergovernmental agreements. The transactions are carried out by power grid companies in a unified purchase and sales model. The scale of cross-provincial and cross-regional power transmission in my country is very large, but in fact, cross-provincial and cross-regional power transmission has not yet been connected with the provincial market, which has greatly restricted the advancement of the power trading system reform.

The Guiding Opinions propose that, on the basis of ensuring the safe supply of power grids to support power generation, the priority power generation plans across provinces and regions should be liberalized in accordance with the principle of increasing power first and then stock, and the national power transmission plan and local government power transmission agreements should be transformed into medium- and long-term contracts authorized by the government. A mechanism should be established for multiple market entities to participate in cross-provincial and cross-regional transactions, and direct transactions between power generation companies and power sales companies and users should be encouraged and supported.

Zhang Jianhong, senior engineer of China International Engineering Consulting Co., Ltd., told a reporter from Shanghai Securities News that converting the national power transmission plan and local government power transmission agreements into government-authorized medium- and long-term contracts has laid the foundation for subsequent market-based transactions.

"Strengthening the dynamic connection between the cross-provincial and cross-regional markets and the provincial market in terms of economic responsibilities and price formation mechanisms can keep the cross-provincial and cross-regional markets relative to the provincial market and prevent a large-scale oversupply or shortage of supply. Accelerating the establishment of a market-oriented cross-provincial and cross-regional transmission rights allocation and trading mechanism can improve the utilization rate of cross-provincial and cross-regional abundant channels and effectively reduce the phenomenon of wind and solar power abandonment and power hoarding." Zhang Jianhong analyzed.

Improve the electricity price formation mechanism

According to the Guiding Opinions, the fundamental role of the medium- and long-term market in balancing long-term supply and demand and stabilizing market expectations should be further played. The market-oriented adjustment mechanism for medium- and long-term contracts should be improved, the transaction cycle should be shortened, the transaction frequency should be increased, the transaction varieties should be enriched, the medium- and long-term transactions with longer terms should be encouraged, and the processes of medium- and long-term transaction organization and contract signing should be standardized.

Some business people believe that the construction of the first and second batches of domestic electricity spot markets has entered the fast lane. The release of the "Guiding Opinions" provides a more reliable documentary basis and more accurate top-level guidance for market construction in spot pilot areas, removes institutional barriers for pilot areas, and reduces the chance of trial and error in pilot areas.

The Guiding Opinions clearly stated that the market-based formation mechanism of coal-fired power prices should be reformed and improved, the electricity price transmission mechanism should be improved, and the price rules of power markets in various regions should be standardized to effectively balance the supply and demand of power. All industrial and commercial users should be encouraged to enter the power market in an orderly manner to ensure that the electricity prices for residents, agriculture, public welfare and other utilities are relatively stable. Clean heating users should be encouraged to reduce heating costs by participating in the power market.

Chai Wei, an expert from the National Energy Economic and Technological Research Institute, said that for the market mechanism, its core is the market-oriented price formation mechanism and transmission mechanism. On the power generation side, the liberalization of coal-fired power generation volume and price has also laid the foundation for the market-oriented price formation of other types of power generation sources. In the future, under the unified framework requirement of "improving the power price formation mechanism" in the "Guiding Opinions", the establishment of a market-oriented price formation mechanism for the power supply side's other power generation entities will be accelerated.

Improve the adaptability of the electricity market to a high proportion of renewable energy

The Guiding Opinions mentioned that we should promote the formation of a new power system that is suitable for China's national conditions and has a stronger ability to absorb new energy. This is a new change from the previous "new power system with new energy as the main body".

At the same time, the Guiding Opinions require strict implementation of laws, regulations and policy measures to support the development of new energy, improve the market mechanism that adapts to a high proportion of new energy, orderly promote the participation of new energy in power market transactions, attract social capital with market-oriented benefits, and promote sustainable investment in new energy. Establish a medium- and long-term power trading mechanism that is compatible with the characteristics of new energy, and guide new energy to sign medium- and long-term contracts with longer terms. Encourage new energy to participate in the spot market by quoting quantity and quotation, and the amount of electricity that has not won the bid will not be included in the assessment of abandoned wind and solar power. Promote peak-shaving services in the spot market, and areas with a high proportion of new energy can explore the introduction of new auxiliary services such as ramping.

"Only with stable cash flow expectations can we attract social capital to invest in new energy and energy storage construction. At the same time, carrying out green electricity trading can give play to the market's role in discovering the value of green electricity, promote the effective consumption of green electricity, and benefit the stable operation of the power grid. Users who directly purchase green electricity can reduce the impact on the power grid." Zhang Jianhong said.