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New business forms in the power industry are accumulating growth
The new business format of the power industry is still in its early stages of development, and faces many problems in terms of system and mechanism, cost control, business model selection, and operating methods. We must strengthen planning guidance, coordinate the development layout of new business formats, improve market mechanisms, improve standard systems, accelerate integration with international markets and international standards, and promote the integration of green hydrogen, green ammonia, etc. into the international market. We must also provide support for new business forms in terms of fiscal and taxation policies, land policies, tax policies, loan policies, etc., and make some achievements in technological innovation. At the same time, new business forms must be integrated into the technological innovation process and national strategies of scientific and technological research.
"In the past two years, various parts of my country have been actively exploring application scenarios and business models for emerging business entities to participate in power market transactions, and a new round of scientific and technological revolution has also emerged worldwide. The vigorous development of these new technologies has provided strong technical support for the development of new business formats in the power industry." Chen Zongfa, chief expert of China Electric Power United, said recently at the "Low Carbon Electric Power Supply Seminar" hosted by the China Energy Policy Research Institute of Xiamen University and others.
After two rounds of electricity reform, my country's market-oriented power trading and clean energy structure transformation have ushered in new development, and it has also given birth to a large number of new technologies in the power industry, and the development of new business forms is in full swing. So, what new changes have been brought about by the current development of the power industry? How to better cultivate new business formats in the future?
Long-term diversified development is the trend
Chen Zongfa said that the development of new business formats in the power industry is a need to seize the opportunities of scientific and technological revolution and industrial transformation and accelerate the development of new quality productivity, and is also a need to focus on clean transformation, energy supply, and accelerate the construction of new power systems and new energy systems. "In recent years, with the rapid development of new energy power and frequent occurrence of extreme weather, the characteristics of "double high and double peaks" and "double random source and load" in the power system have intensified, and the supply and demand characteristics of "usually abundant, tight peaks" or "coordinate risk of power abandonment and power shortage coexisting". It is urgently necessary for the power industry to build new power systems through the development of new technologies and new business formats to achieve the purpose of promoting consumption, stabilizing the power grid and ensuring supply. These new business formats include energy storage, distributed energy, comprehensive energy services, carbon market trading, etc.."
New business forms play an important exemplary role in building new power systems. "All new business forms are highly coupled with the five characteristics of new power systems. In terms of technology, the integration of source, grid, load and storage and multi-energy complement each other through multiple links and multiple energy forms, especially the new energy storage effectively improves the dynamic balance capability of the power system. In terms of management innovation, new business forms and new models close to end users, such as comprehensive energy virtual power plants, which are close to end users, have played an important role in integrating demand response." Zhou Chaoyang, deputy director of China Huaneng Group Energy Research Institute, said.
Zhou Chaoyang pointed out that new business formats will show a diversified development trend for a long time, and are not limited to a single field, and the development curves of different new business formats are very different. "The construction of new power systems urgently needs to make breakthroughs in efficient power generation, long-term energy storage, smart grids and flexible loads, and new models such as virtual power plants and microgrids should accelerate their development. The potential of user-side load needs to be tapped, and promoting the consumption of new energy needs to achieve source-to-load interaction. The development of new business forms requires support for the reform of the power system and mechanism, and establish a unified, open, competitive and orderly power market system."
New business forms give rise to new changes
Industry insiders believe that my country's power industry has entered a new stage of superposition of three phases of energy transformation, reform deepening, and new system construction. New energy such as wind and light will become the main body of installation and electricity, and a large number of emerging entities such as "producers and consumers" will emerge on the user side. The power grid has formed a pattern dominated by the large power grid and integrated with multiple forms. The power grid operation mechanism and balance model will also undergo profound changes.
Zhang Xiaoxuan, deputy director of the Institute of Corporate Strategy of State Grid Energy Research Institute, pointed out that with the full liberalization of coal-fired power on-grid electricity prices, priority generation of new energy, hydropower, nuclear power, etc. in the future will participate more in the market, and all the benefits should be released. On the power consumption side, the scale of market-oriented transactions will further expand in the future, the scale of agent power purchase users will gradually shrink, and the electricity consumption of residents and agricultural enterprises urgently need to be guaranteed by power grid companies. "With the widespread application of new technologies such as the 'big cloud and smart chain', new business formats in the power industry are developing rapidly, and new business entities such as distributed power supplies, energy storage, and virtual power plants are constantly emerging. The individual scale of business entities is small, the overall number is huge and increasingly diverse, and the demand is significantly differentiated."
It is worth noting that promoting the healthy and sustainable development of distributed energy is the key to energy transformation. "Distributed development and utilization are the main model of renewable energy development. They are close to users, have short construction cycles, small investment scale, small land area and diversified business models. They have developed rapidly at home and abroad in recent years. In 2021, the newly installed installed capacity of distributed photovoltaics exceeded that of centralized photovoltaics for the first time, and the industry has developed rapidly. This year, the transaction volume of green certificates soared by 300%, and local support policies were intensively introduced." Duan Jieyi, director of the Distributed Energy Committee of the China Energy Research Association, said.
However, to ensure the healthy and sustainable development of distributed energy, in addition to the efforts of distributed energy itself, it also requires the joint cooperation of power systems and power companies. Some industry insiders said that companies are the executors of the "dual carbon" policy, and listed thermal power companies are the main force of thermal power installed capacity and the leader in the power generation industry. If they play a good leading role in low-carbon transformation, they will have a positive impact on promoting low-carbon transformation in the industry.
In the next step, how should we better cultivate and develop new business forms and stimulate new momentum?
Chen Zongfa suggested that from the perspective of power enterprises, we must increase the "three new investments" from a strategic perspective, coordinate the upgrading of traditional power industries, the growth of emerging industries, and the cultivation of future industries, and inject strong impetus into the development of new quality productivity. "In terms of market mechanism, we actively and steadily promote emerging business entities to enter the market and promote the healthy development of strategic industries. Emerging business entities such as pumped storage, new energy storage, and virtual power plants need to learn from domestic and foreign experience, improve market access and trading mechanisms, and promote the transformation of the power system from 'source and load-to-load-storage interaction' to 'source network."
Creating conditions to accept distributed energy is the core feature of the new power system. Duan Jieyi believes that the transformation of the new power system should adapt to changes such as user-side participation, normalization of source network interaction, and distribution network-led changes. It is necessary to deepen market-oriented reforms, adjust production relations to adapt to the development of distributed energy, combine large power grids with regional intelligent microgrids, and realize intelligent interaction between on-site consumption and source network load storage on the basis of self-balancing and self-scheduling. "In addition, we must fully understand that energy conservation is the zero-carbon energy source, fully tap potential, help energy transformation and effectively reduce investment."
Overall, the new business model is still in its early stages of development, and faces many problems in terms of system and mechanism, cost control, business model selection, and operating methods. Zhou Chaoyang suggested that it is necessary to strengthen planning guidance, coordinate the development layout of new business forms, and at the same time improve the market mechanism, improve the standard system, accelerate the integration with international markets and international standards, and promote the integration of green hydrogen, green ammonia, etc. into the international market. "We must also accelerate the cultivation of new business models, especially in fiscal and taxation policies, land policies, tax policies, loan policies, etc., and make some achievements in technological innovation. New business models must be integrated into the technological innovation process and the scientific and technological research of national strategies, so as to promote their better and long-term development.”
"In the past two years, various parts of my country have been actively exploring application scenarios and business models for emerging business entities to participate in power market transactions, and a new round of scientific and technological revolution has also emerged worldwide. The vigorous development of these new technologies has provided strong technical support for the development of new business formats in the power industry." Chen Zongfa, chief expert of China Electric Power United, said recently at the "Low Carbon Electric Power Supply Seminar" hosted by the China Energy Policy Research Institute of Xiamen University and others.
After two rounds of electricity reform, my country's market-oriented power trading and clean energy structure transformation have ushered in new development, and it has also given birth to a large number of new technologies in the power industry, and the development of new business forms is in full swing. So, what new changes have been brought about by the current development of the power industry? How to better cultivate new business formats in the future?
Long-term diversified development is the trend
Chen Zongfa said that the development of new business formats in the power industry is a need to seize the opportunities of scientific and technological revolution and industrial transformation and accelerate the development of new quality productivity, and is also a need to focus on clean transformation, energy supply, and accelerate the construction of new power systems and new energy systems. "In recent years, with the rapid development of new energy power and frequent occurrence of extreme weather, the characteristics of "double high and double peaks" and "double random source and load" in the power system have intensified, and the supply and demand characteristics of "usually abundant, tight peaks" or "coordinate risk of power abandonment and power shortage coexisting". It is urgently necessary for the power industry to build new power systems through the development of new technologies and new business formats to achieve the purpose of promoting consumption, stabilizing the power grid and ensuring supply. These new business formats include energy storage, distributed energy, comprehensive energy services, carbon market trading, etc.."
New business forms play an important exemplary role in building new power systems. "All new business forms are highly coupled with the five characteristics of new power systems. In terms of technology, the integration of source, grid, load and storage and multi-energy complement each other through multiple links and multiple energy forms, especially the new energy storage effectively improves the dynamic balance capability of the power system. In terms of management innovation, new business forms and new models close to end users, such as comprehensive energy virtual power plants, which are close to end users, have played an important role in integrating demand response." Zhou Chaoyang, deputy director of China Huaneng Group Energy Research Institute, said.
Zhou Chaoyang pointed out that new business formats will show a diversified development trend for a long time, and are not limited to a single field, and the development curves of different new business formats are very different. "The construction of new power systems urgently needs to make breakthroughs in efficient power generation, long-term energy storage, smart grids and flexible loads, and new models such as virtual power plants and microgrids should accelerate their development. The potential of user-side load needs to be tapped, and promoting the consumption of new energy needs to achieve source-to-load interaction. The development of new business forms requires support for the reform of the power system and mechanism, and establish a unified, open, competitive and orderly power market system."
New business forms give rise to new changes
Industry insiders believe that my country's power industry has entered a new stage of superposition of three phases of energy transformation, reform deepening, and new system construction. New energy such as wind and light will become the main body of installation and electricity, and a large number of emerging entities such as "producers and consumers" will emerge on the user side. The power grid has formed a pattern dominated by the large power grid and integrated with multiple forms. The power grid operation mechanism and balance model will also undergo profound changes.
Zhang Xiaoxuan, deputy director of the Institute of Corporate Strategy of State Grid Energy Research Institute, pointed out that with the full liberalization of coal-fired power on-grid electricity prices, priority generation of new energy, hydropower, nuclear power, etc. in the future will participate more in the market, and all the benefits should be released. On the power consumption side, the scale of market-oriented transactions will further expand in the future, the scale of agent power purchase users will gradually shrink, and the electricity consumption of residents and agricultural enterprises urgently need to be guaranteed by power grid companies. "With the widespread application of new technologies such as the 'big cloud and smart chain', new business formats in the power industry are developing rapidly, and new business entities such as distributed power supplies, energy storage, and virtual power plants are constantly emerging. The individual scale of business entities is small, the overall number is huge and increasingly diverse, and the demand is significantly differentiated."
It is worth noting that promoting the healthy and sustainable development of distributed energy is the key to energy transformation. "Distributed development and utilization are the main model of renewable energy development. They are close to users, have short construction cycles, small investment scale, small land area and diversified business models. They have developed rapidly at home and abroad in recent years. In 2021, the newly installed installed capacity of distributed photovoltaics exceeded that of centralized photovoltaics for the first time, and the industry has developed rapidly. This year, the transaction volume of green certificates soared by 300%, and local support policies were intensively introduced." Duan Jieyi, director of the Distributed Energy Committee of the China Energy Research Association, said.
However, to ensure the healthy and sustainable development of distributed energy, in addition to the efforts of distributed energy itself, it also requires the joint cooperation of power systems and power companies. Some industry insiders said that companies are the executors of the "dual carbon" policy, and listed thermal power companies are the main force of thermal power installed capacity and the leader in the power generation industry. If they play a good leading role in low-carbon transformation, they will have a positive impact on promoting low-carbon transformation in the industry.
In the next step, how should we better cultivate and develop new business forms and stimulate new momentum?
Chen Zongfa suggested that from the perspective of power enterprises, we must increase the "three new investments" from a strategic perspective, coordinate the upgrading of traditional power industries, the growth of emerging industries, and the cultivation of future industries, and inject strong impetus into the development of new quality productivity. "In terms of market mechanism, we actively and steadily promote emerging business entities to enter the market and promote the healthy development of strategic industries. Emerging business entities such as pumped storage, new energy storage, and virtual power plants need to learn from domestic and foreign experience, improve market access and trading mechanisms, and promote the transformation of the power system from 'source and load-to-load-storage interaction' to 'source network."
Creating conditions to accept distributed energy is the core feature of the new power system. Duan Jieyi believes that the transformation of the new power system should adapt to changes such as user-side participation, normalization of source network interaction, and distribution network-led changes. It is necessary to deepen market-oriented reforms, adjust production relations to adapt to the development of distributed energy, combine large power grids with regional intelligent microgrids, and realize intelligent interaction between on-site consumption and source network load storage on the basis of self-balancing and self-scheduling. "In addition, we must fully understand that energy conservation is the zero-carbon energy source, fully tap potential, help energy transformation and effectively reduce investment."
Overall, the new business model is still in its early stages of development, and faces many problems in terms of system and mechanism, cost control, business model selection, and operating methods. Zhou Chaoyang suggested that it is necessary to strengthen planning guidance, coordinate the development layout of new business forms, and at the same time improve the market mechanism, improve the standard system, accelerate the integration with international markets and international standards, and promote the integration of green hydrogen, green ammonia, etc. into the international market. "We must also accelerate the cultivation of new business models, especially in fiscal and taxation policies, land policies, tax policies, loan policies, etc., and make some achievements in technological innovation. New business models must be integrated into the technological innovation process and the scientific and technological research of national strategies, so as to promote their better and long-term development.”
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