In the medium and long term, my country's transmission and distribution prices will remain basically stable with a slight increase.

China Energy Storage Network: The level of transmission and distribution prices is significantly related to grid investment, and has obvious characteristics of the grid development stage. At the same time, it is greatly affected by policies. Compared with typical countries such as Europe and the United States, China's transmission and distribution prices are at a relatively low level. In recent years, as the development of the power grid has entered a relatively stable period, driven by the reform of transmission and distribution prices, China's transmission and distribution prices have been reduced year by year. In the medium and long term, China's transmission and distribution prices will basically remain stable and rise slightly.

From the perspective of price level, compared with typical countries such as Europe and the United States, my country's transmission and distribution prices are at a relatively low level. In 2020, the transmission and distribution prices in the United States, China, France, Germany and other countries (regions) were 0.018-0.088 US dollars/(kWh), with an average transmission and distribution price of 0.041 US dollars/(kWh), and my country's transmission and distribution price was 0.027 US dollars/(kWh)].

Figure 1 Comparison of transmission and distribution price levels in some countries (regions) in 2020

From the perspective of price trends, the transmission and distribution prices in mature market countries remain high and stable. my country's power grid construction has entered a relatively stable period from rapid development. In recent years, the transmission and distribution prices have been reduced year by year through policy regulation. Since the separation of power plants and grids in 2002, my country has promoted the upgrading and transformation of rural power grids and the transfer of county companies, accelerated the construction of power grids, and the transmission and distribution prices have continued to rise; since 2016, a new round of transmission and distribution price reforms has established a transmission and distribution price mechanism of "allowable cost plus reasonable profit", and the transmission and distribution prices have begun to decline; in 2018 and 2019, my country has continuously reduced general industrial and commercial electricity prices, and introduced measures including temporary reduction of transmission and distribution prices, reduction of value-added tax measures, and reduction of the average depreciation rate of fixed assets of power grid enterprises, and the transmission and distribution prices have been further reduced; in 2020, affected by the COVID-19 pandemic, industrial and commercial power users will be settled at 95% of the original household electricity price level, which is basically borne by power grid enterprises, and my country's transmission and distribution prices have been further reduced. From 2015 to 2020, the cumulative reduction was 3 cents/(kWh).

Figure 2 Comparison of transmission and distribution price trends in some countries in recent years

From the comparison between China and the United States, my country's transmission and distribution prices are lower than those in the United States. Due to the increase in investment in power grid transformation and construction, the transmission and distribution prices in the United States have been rising steadily in the past decade. The main reasons why my country's transmission and distribution prices remain at a low level are: first, my country's power grid is planned and constructed in a unified manner, and the power grid industry has typical economies of scale; second, the cost of my country's power grid facilities is relatively low, and the cost of transmission lines of the same voltage level in the United States is more than 50% higher than that in China; third, my country's power grid cost control is better, and the unit power operation and maintenance fee is relatively low; fourth, the profit margin of my country's power grid enterprises is much lower than that of the United States, and the net profit margin of the power grid is significantly lower than the regulatory profit margin of the United States.

Figure 3 Comparison of transmission and distribution prices between China and the United States

In the medium and long term, in order to support the development of dual carbon, the large-scale access of new energy will push up grid investment to a certain extent. Taking into account the impact of load growth, new energy consumption demand, and grid asset life cycle, my country's transmission and distribution prices will basically remain stable and rise slightly. (Source: Operation Bureau of the National Development and Reform Commission)