Coal-fired Electricity Price mechanism Dual-carbon target schedule China

 

Deepen the reform of coal-fired electricity price mechanism to help achieve the dual-carbon target on schedule in China

In order to implement the decisions and deployments of the Party Central Committee and the State Council, accelerate the market-oriented reform of electricity prices, improve the mechanism for determining electricity prices mainly by the market, and ensure the safe and stable supply of electricity, the National Development and Reform Commission held a press conference and officially issued the "Regarding Further Deepening the On-grid Electricity Price Market for Coal-fired Power Generation" "Notice on the Reform of Coal-fired Power Generation" (Fagai Price [2021] No. 1439), deploying to further deepen the market-oriented reform of coal-fired power generation on-grid tariffs.

Refer Solar Power in India

 

 

 

The amount of information is huge! Orderly liberalize the on-grid tariffs for all coal-fired power generation, expand the range of fluctuations in market transaction electricity prices, and promote industrial and commercial users to enter the market.

 

Dr. Hua is talking with you about deepening the reform of coal-fired power generation on-grid tariff market, professional analysis and interpretation look down↓↓↓

 

• Decipher
• Deepen the reform of coal-fired electricity price mechanism
• Facilitate the realization of the dual-carbon goal on schedule

The National Development and Reform Commission issued the "Notice on Further Deepening the Market-oriented Reform of Coal-fired Power Generation On-grid Tariffs". 

The notice pointed out that it will further accelerate the market-oriented reform of electricity prices, and promote the participation of all on-grid electricity from coal-fired power generation in the power market. 

The fluctuation range of market transaction prices has been expanded to 20%, the electricity prices in the industrial and commercial sales catalogue have been cancelled, and industrial and commercial users can fully participate in the electricity market. 

They can purchase electricity through independent transactions or power grid agents, adhere to a smooth transition, and ensure the stability of residential and agricultural electricity prices.

 

In the current situation of tight power and coal supply, the issuance of the notice reflects a better combination of an effective market and a promising government, which is important for ensuring the safe and stable supply of electricity, promoting the reform of the electricity market, and building a new type of energy with new energy as the mainstay. The power system is of great significance.

 

1. Can fully stimulate the potential of both supply and demand

Ensure the safe and stable supply of electricity

On the one hand, the floating range of on-grid electricity price for coal-fired power generation is expanded to 20%, which can effectively help coal-fired power plants alleviate the pressure of rising fuel costs, improve the operating conditions of coal-fired power plants, improve the coal-fired power generation capacity of coal-fired power plants, and enhance the reliability of power supply .

 

On the other hand, canceling the sales price of industrial and commercial catalogs and promoting full participation of industrial and commercial users in the electricity market can effectively leverage the power price, restrain the expansion of production capacity in high energy-consuming industries, reduce unreasonable electricity consumption, increase energy utilization, and ease the phasedness of electricity supply. 

The tense situation guarantees the heating and energy security of the people’s livelihood.

 

 

2. Can promote efficient competition in the electricity market

Accelerate the reform of electricity marketization

Promote the entry of all coal-fired power generation and millions of industrial and commercial users into the electricity market, and deregulate the power price of competitive links. 

This can further stimulate the vitality of the electricity market, promote competition in the electricity market, and realize the formation of electricity prices based on production costs, supply-demand relations and value laws.

It helps to open up the value transmission channel of power commodities in the entire energy industry chain, helps restore the true price of power commodities, better exerts the role of market mechanisms, and guides the optimal allocation of power resources. 

At the same time, it also provides price mechanism support for the further development of priority plans for electricity use and the promotion of reforms on the electricity sales side.

 

3. Can promote the transformation and upgrading of coal-fired power, and accelerate the construction of a new power system with new energy as the main body

The primary task of energy development is to provide sufficient power for economic and social development. Flexible resources such as coal-fired power units can effectively alleviate the impact of the randomness and volatility of new energy sources on the safe operation of the power grid.

 

Improving the market price mechanism, promoting the capacity compensation mechanism and auxiliary service market construction, can increase the enthusiasm of coal-fired power plants for flexible transformation, accelerate the transformation of coal-fired power plants from main power sources to regulated power sources, and help coal-fired power plants truly become a new type of power system. 

Ballast and stabilizers” form the joint support of technological innovation and policy mechanism innovation, speed up the construction of an acceptable cost and abundant resource power system regulation system, and fully assist China in building a new power system with new energy as the main body, and realize the double Carbon goals.

 

The component price breaks 2 yuan/watt! Don't buy now means can't buy in the future?

Before and after the National Day holiday, two things affecting the supply chain of photovoltaic modules are constantly being fermented: one is the increasing price of raw and auxiliary materials caused by the upstream power curtailment; Resistance, began to grab and stock up.

 

Under the background of "power cuts", the supply of industrial silicon has been drastically reduced, and some manufacturers have begun to seal orders. In the field of polysilicon, many companies in the industry have also announced that due to the shortage of power supply, in response to the local "dual control of energy consumption" requirements, production lines have temporarily stopped production.

 

The pressure of rising prices of upstream raw materials is ultimately transmitted to component companies. Industry research data shows that in late September, the operating rate of component plants has been reduced. Some component companies have begun to stop production of 156 and 166 related production lines, and only produce 182 and 210 components. Some new plants have also suspended part of the equipment debugging, and production capacity is not available. Released as scheduled; some manufacturers are gradually reducing OEMs.

 

It can be said that this time is different from the past. The most direct impact of the power cut is that the production capacity cannot be released. It is not only a price increase, but perhaps a shortage of goods!

 

The component price has exceeded 2 yuan/watt. It is time to grab the goods under the rising tide

 

Early component prices rose, and some end users chose to wait and see and wait for the price to pull back. The recent panic-like rise has smashed everyone's expectations in one fell swoop. Many pragmatic EPC companies and distributors have chosen to place orders before the eleventh festival.

 

"Worrying about the price increase after the holiday, we ordered some components before the holiday, and some projects have to be opened, followed by the peak installation season of previous years. It is the last word to have goods in hand." An EPC company official said.

 

According to people familiar with the matter, some module factories have suspended module sales and stopped receiving orders before the holiday, and signed module orders have fallen into serious losses. 

Many module manufacturers have begun to suspend shipments, and many installers cannot get their projects. The component has stalled.

 

In the first week after the holiday, the latest third-party price survey showed that the ex-factory tax-included price of 182 single-sided modules has officially exceeded 2 yuan per watt, reaching the historical high point in the past two years, while the prices of 182 and 210 double-sided modules have moved towards 2 Run over the yuan. Before the holiday, the average price of components fluctuated around 1.8 yuan/watt.

 

For component companies, in addition to the price increase in the upstream of the industrial chain, the prices of EVA, POE film, backsheet, glass, aluminum and other auxiliary materials are also at historically high prices. 

Some materials are still in short supply, which makes the component factories burdened. The cost pressure is huge, and profits are getting thinner.

 

Some people in the industry have calculated that if the price of polysilicon rises to 260 yuan/kg, the module must rise to at least 1.9 yuan/watt to protect the capital. Under the influence of continuous price increases in various links, the profitability of module companies will continue to deteriorate.

 

The industry joked that the current price of 2 yuan per watt for a single-sided module is already a "friendly price", but in fact it has almost become the consensus of the module companies.

 

As for the price increase, the module factory is also very helpless. A person in charge of a major module factory said: “The module manufacturer is in the most difficult link of the ecological chain. The downstream development can stand and choose to invest or not invest in photovoltaics. % Or 30%, only the component suppliers are restricted by the downstream and crushed by the upstream. There is no so-called price increase plan, only the so-called price increase countermeasures.

 

Now the highest quotation of silicon materials has reached 260 yuan/kg, and glass and plastic films have risen by 20% and 35% respectively within a month. 

It is estimated that this trend will only increase with the continuous strengthening of dual control and the arrival of the traditional fourth quarter climax. Continue to rise, the duration of this fluctuation will be much longer than we previously estimated, it may be at least 6 months or more, which means that the possibility of price cuts this year is very low. "

 

The material soaring is difficult to solve, and mainstream photovoltaic module companies such as Longi, Jinko, Trina, JA Solar, and Risen Energy even launched their first joint appeal. 

At present, several head component companies have reduced their capacity utilization rates, and it is expected that the current capacity-achievement rate will not exceed 70%, and the utilization rate of second- and third-tier component factories will be even lower.

 

At the same time, due to the reduction in component production, the operating rate of the battery side after the festival has dropped to about 47.%, and the operating rate has been reduced for all sizes, and the 182 has also been reduced significantly. The current shortage of manufacturing capacity will cause the market to install the target in a short time. Difficult to satisfy within.

 

"Some people say that'costs increase by 2 cents are driving the pace of the industry.' I don't think this sentence is alarmist, it is very possible. Under the dual control goal, many material manufacturing companies are restricted in production, stop production, production capacity is limited, supply and demand. The imbalance makes it difficult to cut prices, and many component companies expect that they will be forced to re-evaluate or adjust their annual production and shipment plans.” said the above-mentioned component executives.

 

At the moment when the raw and auxiliary materials are generally rising, it is impossible to allow the supply chain to increase prices without increasing the prices of components. On the contrary, brands that do not increase prices at this time need to be careful. "The component companies whose performance fell in the fourth quarter of last year are still vivid. From this perspective, to cherish brands that can increase prices, at least they are actively responding to this change.

 

Because of price increases, in the second half of 2020, the manufacturing end of the industrial chain has started a continuous game with the end of the power station market. This year's situation is more severe than last year. Looking back on the situation of rushing to install in the fourth quarter of last year, shouldn't it arouse vigilance?

 

 

 

Refer LONGi