Interpretation of the "Overall Plan for Provincial Electric Power Market Trading in Sichuan Province in 2020"

Polaris Power Sales Grid News: The Sichuan Provincial Department of Economics and Information Technology and four other departments officially released the "Sichuan Province's overall provincial power market transaction plan in 2020》, Based on the particularity of Sichuan's hydropower resource endowment, many partners feel that Sichuan's electricity trading rules are "brain-burning". In order to better let friends know and understand, Sichuan Energy Power Sales Company interprets the plan and now shares it as follows:

(Source: WeChat public account "Shizawa Energy Sales" Author: Sichuan Energy Sales)

Part.1Power UserEntry scope

(I) New users

The new users are commercial formal electricity users in the power supply area where the transmission and distribution prices have been approved in Sichuan Province that are operating formal electricity users who comply with national industrial policies, environmental protection policies and energy conservation and emission reduction policies, and fully liberalize specialized industrial users, as well as general industrial and commercial and other specialized users whose network purchase electricity exceeds 1 million kilowatt-hours in 2019.

1. The users who have participated in the market will not change;

2. New users must be specialized users;

3. New users must be in the power supply area where the transmission and distribution price has been approved in Sichuan Province;

4. The user must be a commercial official electricity user, and cannot be temporary construction electricity;

5. Large industrial users are not subject to power limits;

6. The annual purchase of electricity for ordinary industrial and commercial users in 2019 must be greater than 1 million kilowatt-hours.

(II) Users who are not currently entering the market

1. Users of important public utilities and public welfare services such as agriculture, residents' lives, and party and government organs, schools, and hospitals.

2. Among the operating power users, power users who do not comply with the national industrial policies will not participate in market-oriented transactions for the time being. The products and processes belong to the elimination and restriction categories in the "Guidelines for Industrial Structure Adjustment" will strictly implement the existing differentiated electricity price policies.

3. Users who have not established a direct power supply and use contract relationship with the power grid where their power grid is located and users in the local power grid where their power grid has not established a settlement relationship with the Sichuan main network.

(III) User access conditions for strategic long-term cooperation

1. Enterprises supported by the provincial party committee and government, electrolytic aluminum polysilicon, big data, new batteries, and electrolytic hydrogen users. Among them, users of big data, new batteries, and electrolytic hydrogen should comply with the relevant provisions of the "Notice on Further Release and Development Plan to Expand Market-oriented Electricity Transactions in Our Province" (Chuan Economic and Information Power Letter [2018] No. 196) and the "Notice on Further Clarifying Matters Related to the Power Support Policy for Green High-Energy-Loading Industry such as Big Data in Our Province" (Chuan Economic and Information Power Letter [2018] No. 220). Electrolytic aluminum and polysilicon should belong to the encouraged enterprises allowed in the "Guidelines for Industrial Structure Adjustment" (2019 this article).

2. Users of blast furnace slag lifting titanium. Refers to an enterprise that uses high-temperature carbonization-low-temperature chlorination technology to extract titanium from blast furnace slag.

3. Steel enterprises. Steel-making enterprises with an encouragement category that is allowed in the "Guidelines for Industrial Structure Adjustment" (2019 this article) and have an effective capacity of more than 1,200 cubic meters for steelmaking.

The specific list is determined by the Department of Economics and Information Technology, the Provincial Development and Reform Commission, together with relevant units.

Part.2 transaction size

The electricity volume of the electricity market-oriented electricity transaction in the province in 2020 is expected to be about 100 billion kilowatt-hours, and the actual implementation shall prevail. It has expanded by nearly 20 billion kilowatt-hours compared with 2019.

Part.3 market trading products (retail side)

1. Planned transaction types: regular direct purchase, retained power (cannot be represented by the power sales company)

2. Unplanned trading products: strategic long-term cooperation, surplus electricity, low-rise water abandonment, demonstration of hydropower absorption, electricity substitution, and self-produced units suspension replacement. Among them, the hydropower consumption demonstration is a new trading product this year. The pilot program is carried out in six regions: Ganzi, Panzhihua, Ya'an, Leshan, Liangshan and Aba. The pilot scope of power users is the "Implementation Opinions of the People's Government of Sichuan Province on Deepening the Reform of the Power System" (Document No. 26 of Sichuan Fufa [2018]) after the issuance of the "Implementation Opinions of the People's Government of Sichuan Province [2018] Document No. 26) (issued on August 8, 2018) new enterprises (including the expansion capacity of existing enterprises separately installed tables) and do not include transfer and relocation enterprises in the city (prefecture) where the demonstration zone is located.

The power sales company can represent other trading products other than the retention power of retained users. In 2019, other trading products other than the retention power of retained users shall not be represented by the power sales company, and can only participate in the market as wholesale users (the user directly signed a contract with the power plant).

Part.4 Transaction Method

The annual transaction will be carried out in four weeks, and the first three weeks will be carried out in time periods and the platform will be concentrated. The annual contract power transfer transaction will be carried out in the fourth week, and the issuer will use the independent choice of participation methods.

In annual transactions, the platform centralized transaction adopts the "complex bidding match" method, and at the same time organizes the issuance of the platform centralized transactions of the annual balanced electricity structure of both parties (the ratio of the full-scale electricity is 5:2:5; the surplus electricity and waste water are balanced in May) and the 12-month monthly electricity volume of the year (you can declare to participate in a certain month's transaction, or you can declare to participate in a multi-month transaction; the surplus electricity and waste water are May).

The annual platform centralized transaction canceled the δ value converted to the original structure of the abundance and dry structure, and adjusted it to the annual balanced power structure and the 12-month monthly transaction. The annual transaction was adjusted from the original independent bilateral transaction and then the platform centralized transaction to the cross-operated bilateral transaction and platform centralized transaction.

Monthly (mid-month) transactions. During the settlement month, the platform is organized and two independent bilateral negotiation transactions (including independent bilateral negotiation incremental transactions, independent bilateral negotiation reductions, and contract electricity transfer transactions on both sides of issuance and use; conventional direct transactions are only allowed for the two-side independent bilateral negotiation reductions and contract electricity transfer transactions). The last week of the settlement month is the transaction closing time.

Annual transactions are divided into various varieties; in monthly (mid-month) transactions, regular direct electricity purchase is one variety, strategic long-term cooperation, surplus electricity, low-stopping water, and power substitution self-provided units are merged into one variety (no surplus electricity during the dry period, and no surplus electricity, low-stopping water transactions)

For hydropower enterprises that have signed annual transaction contracts with electricity substitution projects, they can obtain the reward indicator for the exported electricity during the flood season at 80% of the corresponding electricity substitution project contracted during the dry period.

Part.5 transaction size

1. The supply and demand ratio for regular direct electricity purchase annual transactions is 1.1:1; there is no supply and demand ratio for monthly (mid-month) transactions.

2. There is no supply-demand ratio for the annual and monthly (mid-month) transactions of other trading products.

Part.6 transaction price limit

Part.7 Other Highlights

1. Transfer transactions are not subject to proportional restrictions, but the transferee cannot accept untraded or undelegated transaction types. The 15% limit on transferable annual contracts for 2019 was lifted.

2. The total deviation assessment fee for the power sales company is at least 20% in principle, in principle, shared by retail users whose agent's electricity consumption deviation exceeds the deviation assessment threshold for the electricity consumption side. The power sales company cannot agree on the contract to bear 100% deviation assessment for the customer. If the power sales company has no deviation, then all users of its agent will be unbiased; if the power sales company has a deviation, then among the customers it represents, customers whose electricity usage deviation ((actual electricity - contract electricity)/contract electricity = electricity usage deviation) exceeds the assessment threshold will forcefully share the deviation assessment costs.

3. To the retail sideElectricity Market TradingThe benchmark electricity price sets the same price upper limit as the annual transactions of each variety in the wholesale market (the transaction types that do not set a price upper limit in the annual wholesale market transactions shall be implemented in accordance with the conventional direct purchase price upper limit); the floating electricity price sets the same price upper limit as the monthly (within month) transactions of each variety in the wholesale market.

4. The annual market transaction power of a single power sales enterprise shall not exceed 20% of the total market power. According to the estimated market size in 2020, the annual market trading power volume of a single power sales company shall not exceed 20 billion kilowatt-hours.

5. If the power sales company and users need to adjust the agreed electricity quantity and electricity price in the monthly (mid-month) transaction, they must issue a written confirmation letter signed and sealed by both parties to the power trading institution within the specified time. The power sales company can no longer change the user's contract price at will, and if the user declares the electricity at will, it may also be subject to corresponding deviation assessment.

6. The contract should determine the power curve or the formation method of the power curve. The power trading institution should provide typical power load curves for reference and selection by market entities, and actively encourage market entities to agree on the power load curve on their own. This move shows that spot stocks are getting closer and closer to Sichuan's power market, and the technical requirements for market entities are becoming increasingly strict, and the trend of spot stocks of electricity is irreversible.

Overall, the policies for trading in Sichuan's power market are becoming more and more standardized, and the Sichuan power market is gradually moving towards the spot power market. The "Guiding Opinions on Sichuan Electric Power Trading in 2020" will further clarify the overall plan.