Shanxi: New energy electricity price is 0 for 17 consecutive hours, market-oriented transactions subvert the original financial calculation model

China Energy Storage Network News: 1. Electricity spot market: New energy electricity zero electricity price

According to the public account "Jinhong Energy", the day-ahead and intraday clearing prices in the electricity spot market on March 4 were at zero electricity price for about 17 hours, which is equivalent to "giving it away for free"!

At 11:13 on March 4, 2022, Shanxi's new energy power generation output hit a historical high of 22.16 million kilowatts, accounting for 61.3% of the province's power generation output at that time.

With the advancement of electricity market reform, especially the expansion of electricity spot market pilot projects, the original economic calculations of photovoltaic and wind power have become difficult to adapt to the current increasingly changing situation.

2. Power market reform changes original revenue expectations

On January 28, the National Development and Reform Commission and the National Energy Administration issued the "Guiding Opinions on Accelerating the Construction of a National Unified Electricity Market System", proposing:

1) By 2030, the national unified electricity market system will be basically established, and new energy will fully participate in market transactions;

2) Establish a medium- and long-term electricity trading mechanism that is compatible with the characteristics of new energy, and guide new energy to sign longer-term medium- and long-term contracts.

3) Encourage new energy to participate in the spot market by reporting quantities and quoting prices. The amount of electricity that has not won the bid will not be included in the assessment of the amount of wind and solar power that has been abandoned.

4) Promote peak-shaving services in the spot market. Regions with a higher proportion of new energy can explore the introduction of new auxiliary services such as ramping.

This means that the 5% wind and solar power curtailment rate target will be gradually relaxed or even become history, and the risks for new energy operating companies will increase sharply; at the same time, new energy projects will have additional costs such as service fees.

For details, please see "Big News! Establish a unified national electricity market, and new energy will participate in transactions in 2030!" and "Additional costs of new energy: ancillary service fees!"

Unlike Guangdong where the spot electricity price is determined by the price of thermal coal, in Shanxi, Shandong and Gansu and other provinces where the electricity spot price is pilot, the market clearing price is basically determined by the output of new energy.

During periods when there is a large surplus of renewable energy power generation output, the clearing electricity price basically continues to remain at the floor price; conversely, during periods when renewable energy power generation output is small and peak thermal power operation is required, price spikes often occur.

The monthly average day-ahead price in Shaanxi Province from May 2020 to May 2021 is shown in the figure below.

3. The proportion of new energy in power installed capacity is increasing rapidly

In recent years, my country's power installed capacity structure has continued the trend of green and low-carbon development, and the development of renewable energy has reached a new level, with the installed capacity exceeding 1 billion kilowatts. According to data from the National New Energy Consumption Monitoring and Early Warning Center, 17 provinces in the country have accumulated wind power and photovoltaic installed capacity exceeding 25% of the local total installed power capacity. (For details, see "Provinces: Wind and photovoltaic project installed capacity, power generation and proportion at a glance!")

Cumulative installed photovoltaic power generation capacity (10,000 kW) and its proportion of total installed capacity in each region by the end of 2021

Cumulative wind power installed capacity (10,000 kW) and its proportion of total installed capacity in each region by the end of 2021

As the proportion of installed capacity and power generation of new energy in electricity increases, special attention should be paid to the following:

The financial calculation model of the original project may no longer be applicable to the new project!

The financial calculation model of the original project may no longer be applicable to the new project!

The financial calculation model of the original project may no longer be applicable to the new project!