Promote energy transformation with a systematic concept

To address climate change, countries around the world are acceleratingEnergy Transformation。

General Secretary Xi Jinping emphasized thatCarbon peakCarbon neutralityIt is a broad and profound systemic economic and social change. We must integrate the systematic concept into the entire process of "dual carbon" work, and focus on handling the relationship between development and emission reduction, overall and local, long-term goals and short-term goals, and government and market.

The report of the 20th National Congress of the Communist Party of China clearly stated: "Based on my country's energy and resource endowment, we insist on establishing first and then breaking, and implementing the carbon peak action in a planned and step-by-step manner."

Trends of my country's energy transformation

my country's energy development has accelerated its transformation in production, consumption, industry, technology and utilization efficiency, and multiple relationships need to be handled well.

First, the energy supply is clean. Fossil energy consumption is the main source of greenhouse gas emissions. In order to achieve the "dual carbon" goal, we should vigorously develop non-fossil energy represented by scenery and light, promote the clean and efficient use of fossil energy, and accelerate the transformation of main energy from fossil energy to non-fossil energy.

The second is electrification of energy consumption. Electric energy is a clean, efficient and convenient secondary energy source, and electrification has become one of the main trends in global energy transformation. The main way to utilize non-fossil energy is power generation. The continuous improvement of electrification level through electric energy substitution will help improve the energy consumption structure and improve the efficiency of terminal energy utilization.

The third is the digitalization of the energy industry. The integrated development of energy industry and digital technology is an important engine to promote the upgrading of my country's energy industry foundation and the modernization of the industrial chain in the new era. Through technologies such as "big cloud and material movement and intelligence chain", it will fully release the value potential of energy data elements, which will help break through information barriers between different entities and improve the coordinated operation efficiency of upstream and downstream of the industrial chain and between industries.

Fourth, the energy system is intelligent. On the basis of digital implementation, we will promote the extensive deployment of intelligent perception and smart terminals, the high integration of energy flow and information flow, strengthen the application of artificial intelligence technology, continuously strengthen the considerable, measurable, controllable and adjustable capabilities of the energy system, and comprehensively improve the intelligence level of multi-energy complementary joint scheduling.

Fifth, energy utilization is efficient. my country's industrial structure is more heavy and its energy structure is more coal-oriented, resulting in an overall high energy consumption intensity. Through the development and application of emerging technologies such as multi-energy complementary integration and digitalization, it will help improve the efficiency of energy in all aspects such as production, processing conversion, utilization, and management.

Challenges facing my country's energy transformation

New energy is developing rapidly, the world's energy pattern is profoundly adjusted, and climate change response has also entered a new stage. Against this background, my country's energy transformation will face six challenges.

First, the challenge of "establishing first and then breaking" is huge. The gradual withdrawal of traditional energy should be based on the safe and reliable replacement of new energy. At present, my country's new energy power generation installed capacity continues to grow rapidly and has become the incremental main body of power generation installed capacity. However, due to the low utilization hours, it is difficult to become the main body of power in a short period of time. As of 2023, the proportion of new energy power generation installed capacity reached 36%, but the proportion of power generation reached only about 1/6; at the same time, my country's thermal power construction has slowed down significantly, significantly lower than the average installed capacity. According to the 30-year design life of thermal power units, the thermal power capacity to be retired from 2020 to 2040 is nearly 660 million kilowatts, accounting for about half of the installed capacity of thermal power. Under the influence of factors such as the difficulty of new energy to shoulder heavy responsibilities and the retiring of thermal power units, the supply pressure of the power system is huge.

Second, the power system regulation capacity is difficult to meet the needs of larger-scale new energy development. As of 2023, the proportion of traditionally regulated power supplies such as pumping and gas in my country was only 6.0%, and the scale was only 16.8% of new energy; the proportion of flexible power supplies in the United States and Spain was 49% and 34% respectively, which is 8.5 times and 1.5 times the installed capacity of new energy. In order to adapt to the large-scale utilization of new energy, it is necessary to accelerate the flexible transformation of coal-fired power, increase the production and application of new energy storage, and release the potential of flexible resources on the demand side.

Third, the rising cost of new power systems urgently requires price guidance. In the process of achieving the "dual carbon" goal, the power system will undergo major changes in power structure, grid form, etc., which will generate a series of new costs, requiring scientific and fair burdens for all kinds of market entities. We should fully consider the end users' affordability and gradually establish an electricity price formation and guidance mechanism that adapts to the new power system at the whole society.

Fourth, the market mechanism for the coordinated operation of "source, network, and load storage" is not yet sound. The cost of the integrated source, grid, load and storage projects are generally high. In the absence of a market mechanism, the economy of the project will be affected; the power grid and power side energy storage, load-side auxiliary frequency regulation and other services still lack scientific and effective pricing methods and business models; the relevant laws and regulations of "virtual power plants" are not sound, and there is a lack of a mechanism to participate in the balance of power supply and demand, and it is difficult to promote the interaction of "source, grid, load and storage" through demand-side management.

Fifth, the demand-side resources have not been fully explored and the degree of users participating in the spot market is low. It is estimated that by 2025, the demand response capacity of each province will reach 3% to 5% of the maximum electricity load, which is still a big gap compared with developed countries; although my country's power market-oriented reform has achieved phased results, it is still moving towards deep waters. In 2023, the national electricity market will trade electricity in 61.4% of the total electricity consumption in the society, of which the proportion of medium and long-term trading electricity exceeds 90%, and the proportion of spot trading electricity is less than 10%. It is difficult for user prices to effectively reflect the actual changes in power supply and demand.

Sixth, there is still great uncertainty in technological innovation and commercial applications. At present, emerging technologies such as electrochemical technology (P2X) for renewable energy consumption, hydrogen production, ammonia production technology, carbon capture, utilization and storage technology (CCUS) are mostly in the stage of technological exploration and demonstration application. Large-scale and commercial deployment is mainly restricted by factors such as high costs, large energy consumption, poor reliability, and lack of business models. It is necessary to strengthen national policy guidance, accelerate the coordinated research of upstream and downstream enterprises in the industrial chain, increase technology demonstration application and industrial cultivation, and accelerate cost reduction and technological upgrading.

Focus on my country's energy transformation

my country's energy transformation is a systematic project, and we must adhere to a systematic concept and actively plan and deploy energy transformation work.

First, coordinate development and security. Development is the top priority, and safety is the bottom line. Since the reform and opening up, my country's economic development has achieved remarkable achievements. In 2023, my country's total economic output reached 126 trillion yuan, ranking second in the world, but its per capita GDP is only about 30% of the average level of the OECD, and it still has great growth potential. In order to achieve the goal of becoming a socialist modern country, my country's energy and electricity demand will continue to grow rigidly in the future. Energy security and safety are related to the national economy and people's livelihood. We must coordinate the relationship between high-quality economic development and energy and electricity security.

The second is to coordinate energy supply and transformation. In order to achieve the "dual carbon" goal, it is the general trend to promote the cleanliness of energy supply and electrification of energy consumption. Energy production and consumption structure, energy and power system form will face huge changes. We must adhere to the general direction of clean and low-carbon, do a good job in basic energy supply guarantee, and handle the complementary, coordination and substitution relationship between different energy varieties at each stage of the transformation, so as to ensure the steady progress of energy transformation and the simultaneous improvement of supply guarantee capacity.

The third is to coordinate traditional energy and new energy. In order to adapt to the demand for large-scale grid connection of new energy, it is necessary to focus on improving the regulation capacity of new power systems and continuously promote the flexible transformation of coal-fired power; orderly promote the construction of pumped storage power stations; reasonably arrange peak-shaving gas and electricity, encourage cogeneration gas and electricity to carry out flexible transformation; promote the large-scale application of advanced energy storage technologies and add new regulation means; guide new energy to actively participate in system regulation, and improve the friendship between new energy networks through multiple channels.

Fourth, coordinate the government and the market. We should strive to promote the "organic combination" of "effective government" and "efficient market", improve relevant laws and regulations, revise the "Electricity Law" and the "Renewable Energy Law", promulgate the "Energy Law", and first ensure the smooth progress of energy transformation through laws and regulations; in addition, we should continuously improve the market and electricity price policy mechanism, innovate business models, and give full play to the decisive role of the market in the optimal allocation of resources.

Fifth, coordinate supply and demand. In order to ensure the safety of energy and electricity, both supply and demand need to work together to ensure that the energy and electricity supply remains moderately abundant to deal with emergencies such as extreme weather; at the same time, we should increase the development and utilization of demand-side resources, improve demand response incentive policies and market mechanisms, and encourage users to actively participate in the spot market, and change from the source to the source and the source and the interaction between the source and the source and the source and the load.

Sixth, coordinate centralized and distributed development of new energy. The development of large-scale scenery and light bases will help achieve the optimal allocation of new energy resources nationwide; at the same time, distributed energy has the advantages of low construction costs, short construction cycles, and local nearby consumption, and is also an important way to achieve efficient development and utilization of energy. It should adhere to the development idea of centralized and distributed, take into account the needs of energy transformation and the carrying capacity of the power grid, scientifically formulate new energy development plans, and improve the new energy consumption ideas.

7. Coordinate the extraction and new energy storage. Energy storage is an important regulatory resource for new power systems, and different energy storage technology routes have their pros and cons. Pumped storage has the advantages of large capacity, high reliability, good economy, and mature application technology, but it is limited by factors such as high site selection conditions and long construction cycle; the site selection of new energy storage is flexible, the construction cycle is short, and the response is fast and flexible. However, at this stage, there are problems such as high unit investment costs, large safety hazards, and short equipment life. It is necessary to adapt to local conditions, coordinate planning, and scientifically allocate various energy storage resources.

Eighth, coordinate the utilization of terminal energy such as cold, heat, electricity, and hydrogen. We should vigorously develop terminal comprehensive energy utilization to achieve complementary, cascaded and efficient use of various energy sources such as cold, heat, electricity, gas, and hydrogen to meet users' diversified energy consumption needs; promote the clean utilization of terminal fossil energy, accelerate the promotion and application of power substitution technologies, and continuously improve the electrification level in industries, transportation, construction and residents; adhere to classified and local policies, and promote the direct utilization of renewable energy through geothermal energy, biomass energy and other technologies.

my country's energy consumption accounts for more than one-quarter of the global share, and carbon dioxide emissions account for nearly 30% of the global share. my country's green and low-carbon energy transformation will not only benefit China, but will also make important contributions to global energy transformation.

Only by based on my country's energy resource endowment, adhering to a systematic concept, accelerating the pace of technological innovation, deepening institutional and mechanism reform, and focusing on building a new energy system and a new power system, can we embark on a path of green, low-carbon and sustainable development of energy and electricity with Chinese characteristics.