Besides the cost of power generation, there are al

2022-08-12
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In addition to power generation costs, there are transaction rules that determine the reduction of electricity prices. On January 3, at the executive meeting of the State Council chaired by the premier of the State Council, the voice of "vigorously promoting the reduction of electricity prices" attracted widespread attention. Many people also raised questions: the coal price is fixed, and the transmission and distribution electricity price has also been approved. How can the electricity price be reduced

Jing Jian found that at present, the articles on the decline of electricity price in the market are mostly analyzed from the power generation cost - the trend of coal price and start-up cost. However, economic principles tell us that the price of a commodity is determined by supply and demand in addition to value. We cannot ignore the impact of supply-demand relationship on commodity prices. The same is true of the power market. We take Guangdong, which has done the best in data disclosure, as the analysis sample

the competition ratio coincides with the price difference curve

Guangdong's first monthly centralized bidding transaction in 2018 once again hit a new low, reaching -36.5% per kWh. Many people who signed a minimum guarantee of 5 points or long-term cooperation used 8 points to bind customers shouted miserably

if you have been studying the Guangdong market, you must know how the monthly clearing prices at the beginning of 2017 broke the imagination of market personnel. The huge price gap means greater profit sharing, and the price gap transmission mechanism also means that this is the meat cutting on the power generation side. It can only be said that now it is cut less

in fact, since the beginning of 2017, the supply-demand ratio and effective competition ratio determined by Guangdong rules have changed several times: from the supply-demand ratio of 2 + 3 to the clear concept of 1.5 supply-demand ratio, and gradually fixed at the effective competition supply-demand ratio of 1.2. What is effective competition? That is, deducting the peak electricity that must be cleared in priority and the heating demand electricity that is forced to be traded, and then calculating the effective upper limit of competition on the power generation side according to the supply and demand coefficient of 1.2

we have made a chart based on the effective competition ratio and price difference data of all monthly bidding transactions in Guangdong since 2017, and attached the trend chart of clearing price difference to compare with the trend of supply-demand ratio. Interestingly, we can see that the trends of these two lines are highly consistent

in fact, almost every change of trend is accompanied by the adjustment of rules

in the first two months of 2017, Guangdong has not set a strict limit on the ratio of supply and demand, which is basically maintained at more than 2. Due to the small size of the formula 1 used in injection molding products and the large scale of suppliers, power generation groups have to offer more favorable prices in order to gain more market share (power generation hours). In this process, the cost advantage of a few large generator units has become prominent, And with its power scale, it can often clear the price difference around. On the contrary, small generator sets appear jittery. Once the clearing price difference is widened, it may break through the cost line and face losses. This is a market that no one wants to see. After all, we can milk and drink, but we can't starve the cows to death

therefore, on March 24, 2017, the competent department began to adjust some rules in the notice on clarifying matters related to the 2017 market transaction organization: the monthly competition ratio was reduced to 1.5; The lowest quotation is increased from -500% to -450% per kwh; The electricity quoted at the single end of the user side shall not be less than 4million kwh. Clearing spreads also fell in April

in fact, it is acceptable to follow this script, but the price difference in July suddenly widened. In this way, the effective competition supply-demand ratio of 1.2 came out. Later, as we all know, the supply-demand ratio and the clearing price difference happily became two "approximate" parallel lines

small supply-demand ratio encourages "pit filling" behavior

according to the data released by the national energy administration, the utilization hours of thermal power in Guangdong during the month of 2017 was 3449 hours, ranking 21 in all provinces and regions; The installed capacity of thermal power ranked fourth, followed by Shandong, Jiangsu and Inner Mongolia. We can also roughly infer that the electricity market in Guangdong is obviously oversupplied at present before we get the exact power balance and trans provincial power transmission in Guangdong

back to what we talked about at the beginning, value and supply-demand relationship determine price. In the gradually liberalized power market, the supply-demand ratio of most provinces is artificially set, which is part of the trading rules

we can see that too small supply-demand ratio makes the planned nature of the market more obvious. At the same time, it also makes the market power of power generation groups play its power. Filling the pit by declaring non traded electricity can even create a situation of supply-demand balance to a certain extent, and the unified settlement of price differences will become controllable. Because the supply and demand is relatively small, some generator units can play this role as long as they eliminate about 15% of the electricity

according to the data of generator unit declaration and transaction in January, the non transaction rate of many units has crossed the range of 20% to 80%. From the effective competition ratio of 1.2, it is almost impossible to fill the pit without filling

the behavior of pit filling is understandable. When the clearing method of price difference matching and the competition were relatively large in 2016, the behavior of pit filling mainly occurred in power selling companies. Now it is only the change of rules that determines that the party filling the pit has become a power plant

these are the normal reactions of market players to market rules

how long will this situation last

from the perspective of the competent department, the starting point for the adjustment of the supply-demand ratio is good. After all, in the early stage of market construction, there needs to be a stable market in order to gradually add bricks and tiles and complete the grand plan of market construction planning; In addition, it is also an indisputable fact that the operation of power plants is difficult. Blindly pursuing high price difference on the power generation side may also bring bad consequences

at the executive meeting of the State Council on January 3, the premier proposed to vigorously promote the reduction of electricity prices. Where does the space come from? In the whole power consumption link, from source to load, the third is to implement four random sampling methods. Among them, the transmission and distribution link has implemented the provincial transmission and distribution electricity price verification. The mechanism of "reasonable cost + permitted income" has released more than 30billion price reduction space, and the remaining space is from the fundamentals of oversupply in the power industry

in the case of oversupply, the price is bound to decline, but this can not be achieved through traditional administrative means, but through the invisible hand, that is, the market mechanism. This is the original intention of the construction of all provincial power markets. The construction of a well functioning market mechanism is not achieved overnight. We can regard Guangdong's previous adjustment rules as a process of patching and updating. After all, we should not only avoid the losses on the power generation side caused by fishing on the power consumption side, but also beware of the market power control situation of the power generation group. Such a monthly price difference is half of the average price of the long-term association in 2018, which has also caused survival pressure for many power selling companies. Jing Jian also raised this concern in the monthly analysis in January - it is an inevitable process for the waves to clear the sand, but if the rule setting causes the "serious injury" of power selling companies, this is also a situation that market builders do not want to see

we can find more room for price reduction through appropriate market competition structure design and fair competition, but more importantly, the gradual construction of market mechanism, how to ensure the interests of all parties in the market, and how to build a market that does not favor one party is the ultimate goal

since there have been many rule adjustments in history, future rule adjustments are also conceivable. I don't know how long the supply-demand ratio of 1.2 will last under the current curvilinear situation in Guangdong

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