Many experts interpret the "Guiding Opinions on Deepening Power System Reform and Accelerating the Construction of a New Power System"

On July 11, the second meeting of the Central Committee for Comprehensively Deepening Reform was held. The meeting reviewed and passed the "Opinions on Building a New System for Open Economy with a Higher Level" and Promoting the Construction of a New Development Pattern", "Implementation Plan for Deepening Rural Reform", "Opinions on Promoting the Gradually Transfer of Dual Control of Energy Consumption to Dual Control of Carbon Emissions", "Opinions on Pilot Reform of the Remuneration System of Colleges and Research Institutes", "Implementation Opinions on Further Deepening the Reform of the Oil and Natural Gas Market System and Improving the National Oil and Gas Security Capacity", "Opinions on DeepeningPower system reformSpeed up constructionNew power system》》》.

The above series of "Opinions" involves agriculture, energy, education and other aspects, and is of great significance to China's future institutional and mechanism innovation and development.

In terms of electricity, the meeting emphasized:

• We must scientifically and rationally design the construction path of new power systems, and gradually reduce the proportion of traditional energy in a planned and step-by-step manner based on the safe and reliable replacement of new energy.

• We must improve the system and mechanism to adapt to the new power system and promote the strengthening of power technology innovation, market mechanism innovation, and business model innovation.

• We must promote a better combination of an effective market with an effective government, continuously improve the policy system, and provide basic public services for electricity.

Although the full text has not been published yet, the "Guiding Opinions on Deepening Power System Reform and Accelerating the Construction of a New Power System" has attracted widespread attention, and some media exclaimed that "a new round of electricity reform is coming", "the power system reform is set off again", and "the expectation of electricity reform is heating up." Regarding this important "Opinion", Telecom New Media invited some experts in the industry to analyze and comment.

Liu Manping, an expert on energy issues,

In the "Opinions on Promoting the Gradually Transfer of Dual Control of Energy Consumption to Dual Control of Carbon Emissions", "Implementation Opinions on Further Deepening the Reform of the Oil and Natural Gas Market System to Improve the National Oil and Gas Security Capacity" and "Guiding Opinions on Deepening the Reform of the Power System and Accelerating the Construction of a New Power System", "Double Control of Energy Consumption to Driving the Reform of the Power System" and "Double Control of Energy Consumption to Driving the Construction of a New Power System", "Double Control of Energy Consumption to Driving Carbon Emissions" have actually been proposed in the industry very early, especially after the "double carbon" goal was proposed, it hopes to use the assessment method of "double control of carbon emissions" to lead and promote the clean and low-carbon transformation of the industry. Previously, the National Development and Reform Commission has issued several documents emphasizing that "double control of energy consumption gradually shifts to dual carbon emissions." Among them, on November 16, 2022, the National Development and Reform Commission, the National Bureau of Statistics and the National Energy Administration jointly issued the "Notice on Further Improving the Work of Not Including New Renewable Energy Consumption in Total Energy Consumption Control". Renewable energy can be excluded from the dual energy consumption control due to carbon emissions. The meeting passed this opinion, which reflects the confirmation and clarity of the senior management.

Documents on oil, gas and electricity reflect the spirit of "reform is always on the road" and "reform is away from problems". The reason why the opinions on oil, gas and electricity development and reform were issued again within less than 8 years is mainly because due to changes in the external environment, oil, gas and electricity development and reform face new tasks and challenges. For the oil and gas industry, as competition between major powers intensifies and the outbreak of the Russian-Ukrainian conflict has led to the increasing risks faced by the energy industry chain, the importance of oil and gas security has been enhanced. How to ensure oil and gas safety in the new era has become a new task and topic, especially the reserve mechanism to ensure the bottom line demand of oil and gas. In addition, after the establishment of the National Oil and Gas Pipeline Network Company, it changed the previous oil and gas market operation structure, and also brought new problems that need to be solved. In addition, the problems and difficulties in the oil and gas system that have not been truly solved, such as price mechanism, market access, market supervision, etc., all need to further deepen the reform of the oil and gas market system.

For the power industry, the power system reform document issued in 2015 is still a system reform that is centered on the power operation system with traditional energy as the main body. It cannot take into account the impact and changes brought about by the rapid development of new energy in my country in recent years, nor can it be included in the statement "building a new power system" proposed by the central government on March 15, 2021. Moreover, since the new power system was proposed, should the new power system be the same? What characteristics do they have? How to build? The industry is very concerned and has different understandings and interpretations. This meeting clarified from the aspects of power source structure, power safety guarantee, market operation, policy means, technical means, etc. that the new power system should have "five characteristics" under the new situation: clean and low-carbon, safe and abundant, economical and efficient, supply and demand coordination, flexible and intelligent, and made the clearest definition and explanation of the "new power system". Moreover, since the last round of power system reform, many tasks have not been completed and the problems have not been fundamentally solved, for example,Electricity MarketConstruction, auxiliary service mechanisms, etc. also need to be further improved, and the construction of a national unified power market needs to be further promoted. All of these need to continue to deepen the reform of the power system.

Of course, the above three documents can also be viewed as a whole:

The "Opinions on Promoting the Gradually Transfer of Dual Control of Energy Consumption to Dual Control of Carbon Emissions" reflects the adhering to the guidance of energy conservation and carbon reduction, and guide and promote energy transformation and green and low-carbon development of the entire society.

The "Implementation Opinions on Further Deepening the Reform of the Oil and Natural Gas Market System and Improving the National Oil and Gas Security Capacity" reflects the grasp of the shortcomings of my country's energy security - oil and gas security issues, take relevant measures to improve the security capacity, and solve energy security during the transformation process.

The "Guiding Opinions on Deepening Power System Reform and Accelerating the Construction of a New Power System" reflects the grasp of the core issue of my country's energy transformation - the construction of a new power system, and use the transformation of the power system to adapt to the rapid development of new energy and the urgent need for energy transformation under the new situation.

Professor Xie Jingdong from Shanghai Electric Power University

The "Guiding Opinions on Deepening Power System Reform and Accelerating the Construction of a New Power System" is an important milestone document in the construction of my country's new power system.

There are three major characteristics of the power system in the process of transformation from traditional to new type: the power system development format is complex, the series of electricity products, and the diversified positioning of market entities.

To implement the spirit of the document, two keys are to do well:

First, it is necessary to design mechanisms based on the evolution of the three major characteristics of the power system, improve the incentive compatibility between the mechanism and the system, and stimulate the industry's development momentum with an optimized mechanism;

Second, it is necessary to strengthen the construction of the power market governance system, improve the effective matching between the mechanism and the system, and promote an "effective market" with "effective government".

Wu Jiang, Part-time Professor, School of Applied Economics, Renmin University of China

This is another understanding and promotion of the transformation and construction of new power systems. It is not the first or the last. It reflects the necessity of the transformation and construction of new power systems, and it also reflects its complexity, difficulty, long-termness and openness, which requires continuous exploration and efforts from all walks of life.

1. What are the basic characteristics of the "new power system"?

Safety, economy, environmental protection, automation, and system collaboration are requirements of modern power systems. With the development of low carbon, more and more new energy sources represented by "scenery" are put forward, and new requirements are put forward for the power system. The "duck curve" evolved into the "canyon curve", which needs to change from the traditional "stability" to the emphasis on "abundance", that is, a higher security margin, and needs to change from the traditional "balance" of supply and demand to a more emphasis on "coordination", that is, a more proactive social responsibility mechanism for system components; for example, as the proportion of new energy with random volatility increases, the requirements for control and regulation will inevitably change from traditional automation and informatization to improving higher levels such as "flexibility" and "intelligence".

So how much more new energy will be in the "new power system"? There are already formulations such as "mainstream", "main force", "main body" and "high proportion". The author personally has only one result, that is, wind power photovoltaics have developed from "new energy" to conventional energy.

To achieve low-carbon transformation in the power industry, what is the biggest change brought about by wind power photovoltaics from "new energy" to traditional energy? Even if "scarcity" is about to change, the policy direction will inevitably change accordingly.

Scarcity is one of the basic driving forces for the evolution of industrial policies. In the past decade, the author has done countless topics of "promoting the development of new energy" and "guaranteeing new energy consumption". Why? Because of its scarcity. Whether in the name of clean and environmental protection or low-carbon, it is all because of its scarcity and various policy support is reasonable.

When the power industry has achieved a low-carbon transformation, in the future "new power system", wind power and photovoltaics will definitely not be scarce to develop into conventional energy with large quantity and low price - what is scarce at that time? It is an adjustable output capability that matches "Scenery".

Therefore, the policy thinking that truly adapts to the "new power system" is to truly treat wind power photovoltaics as conventional energy. In addition to further reducing its costs, more policy resources and governance energy should be used to study the adjustable contribution capabilities that support wind power photovoltaics, as well as how its industrial system is designed, reformed and improved.

In addition, the process problem, if energy storage technology cannot make rapid progress as expected? What if fossil energy loses investors too soon? If the fossil energy price is too high, it cannot contribute to the adjustable capacity of new energy? In the above situations, how to protect new energy? ——Good policy thinking should not just add icing on the cake, but also require "extreme thinking + bottom-line thinking".

2. Why does the power industry have the problem of "model design"?

Market mechanisms such as supply and demand, price, and competition are one of the underlying mechanisms for the operation of modern human society, but in addition to most spontaneous and natural market behaviors, there is also a market model that requires artificial "design".

For example, the stock market with massive many-to-many transactions requires design and supervision; and now the power system not only has massive many-to-many transactions (bilateral transactions, multilateral implementation), but also has the problem of two layers of "physical relationship PK economic relationship", and there are multiple value goals such as "safety, stable PK economy, efficient PK environmental protection and low carbon", and there are problems such as "information cannot be symmetrical, decision-making cannot be independent, and property rights cannot be clarified", so more complex design and supervision are needed.

The operating model of the power industry is not a natural and spontaneous classic market; the low-carbon transformation of the power industry requires artificial design. With the development of the power industry for more than a hundred years, this so-called "artificial" has long been elevated from a small-scale cooperative and enterprise alliance to "national public power + professional independent public institutions".

Therefore, the essence of the "model design of the power industry" is the design of public power, which is how the government governs the industry and interferes with the design of the market. It cannot be offside or absent. Furthermore, the so-called market of the power industry must be highly limited and must be matched with a package of industry regulatory mechanisms, rather than omnipotent and full responsibility.

Looking at the European energy crisis in recent years, facing market failures such as price surges, price limits, huge profits and taxes, consumption subsidies, rotation suspension of rations, export controls, government-business negotiations, and market rules modification... All old capitalist countries are not bound by market fundamentalism, and all kinds of government intervention methods should be used.

As a socialist country, China's performance of government responsibilities more reasonably and actively is obviously our institutional advantage in the field of electricity with highly complex information and behaviors and highly diversified values.

——This is the basic logic of the "meeting emphasis": "We must improve the system and mechanism to adapt to the new power system, promote the strengthening of power technology innovation, market mechanism innovation, and business model innovation. We must promote the better combination of effective markets with effective governments, continuously improve the policy system, and provide basic public services for electricity."

The author believes that the current model design of China's power industry has the following problems:

First, over-belief in market mechanisms. For example, can peak electricity prices attract investment? What type and scale of investment? How many consumers can be guided to change their behavior? How do users evaluate the loss of peak load, their economic value and social value?

The second is to rely too much on policy resources. For example, how large can the capacity electricity price be? Are there any quantitative estimates at present? How can coal machines compete with real new energy and new technologies for policy resources?

Third, excessive resistance to public rights intervention. For example, how can the government intervene in accordance with the law and perform its duties in accordance with the situation of skyrocketing coal prices and market failures?

Fourth, ignore the coordination between market system and industrial system. For example, China's unique "bottom-up" business model, long-term continuous operation in low-yield scenarios, and countercyclical and counter-market output usage value, which is the significance of China's governance in the field of infrastructure?

——In short, this meeting of the Deep Reform Commission touched on two important topics: "Basic Characteristics of New Power Systems" and "Power Industry Model Design", which is undoubtedly another in-depth and promotion of the transformation and construction of new power systems. It is more important to see which step you take in practice.

Wu Junhong, an expert in power distribution and sales reform

The meeting is an outline and every word is important and worthy of careful experience.

1. "We must scientifically and reasonably design the construction path of new power systems, and gradually reduce the proportion of traditional energy in a planned and step-by-step manner on the basis of safe and reliable replacement of new energy."

Interpretation: On the premise of ensuring the safety of energy use by "establishing first and then breaking", we will plan and gradually realize the replacement of new energy sources and reduce the proportion of traditional energy. It should be noted that "reduce the proportion of traditional energy" rather than replace traditional energy.

2. "We must improve the system and mechanism to adapt to the new power system, and promote the strengthening of power technology innovation, market mechanism innovation, and business model innovation."

Interpretation: "We must improve the system and mechanism to adapt to new power systems", rather than a separate "market mechanism". Second, it emphasizes "market mechanism innovation", including renewable energy policy system, virtual power plant transactions, etc., needs to be connected with marketization; Third, it emphasizes "business model innovation", and still emphasizes adaptation to new power systems.

3. "We must promote a better combination of an effective market with an effective government, continuously improve the policy system, and provide basic public services for electricity."

Interpretation: First, it emphasizes the "proactive government", second, it emphasizes the "continuous improvement of the policy system", and third, it emphasizes the "maintaining a good supply of basic public services for electricity". Reform is not easy, and it is necessary to introduce more supporting policies for the government to "prescribe the right medicine". Since the issuance of Document No. 9 in mid-2015, many supporting policies have been issued, but they have not been implemented in sufficient operation, which is the experience of most front-line workers in reform.

In short, we are waiting for the official public release of documents such as the "Guiding Opinions on Deepening Power System Reform and Accelerating the Construction of a New Power System".

Jiang Jiang, General Manager of Qiushi Energy Technology (Shenzhen) Co., Ltd.

The construction of new power systems is an important part of achieving the "dual carbon" goal. Due to the random volatility of new energy power generation, the construction of new power systems cannot be achieved only from the supply side to build new energy power generation, but also requires a large amount of regulatory resources. Due to the uncertainty of new power systems, how to allocate resources and improve the efficiency of asset investment and operation, it needs to be solved simultaneously from the institutional and mechanism level.

For power sales companies, the fluctuations in power supply and demand will increase significantly in the future, the types of trading units will increase in the market, and the construction of the spot power market will be further deepened. The understanding and ability of transactions will gradually become the core competitiveness of power sales companies and the core competitiveness of all power asset operators.

Of course, the reform of the power system and the promotion of power market construction need to further expand the market scope, allow more power facilities and power users to enter the market, optimize the balance of the power system on a larger scale, and help the consumption of new energy.

At the same time, as the market scope expands and trading rules deepens, the regulatory requirements of the power market are getting higher and higher. The wholesale market needs to further regulate the market's conspiracy and manipulation of market behavior, introduce more transaction entities to increase market liquidity, and strictly supervise the retail market signing and fulfilling contracts in the retail market, and crack down on fraud and fraud in accordance with the law. Only in this way can we ensure the reform and transformation of my country's huge power system from physical to economic level from the physical to the economic level.