Since April 7, Liu Tienan, director of the National Energy Administration, has visited Datang, Huaneng, and Huadian to conduct intensive investigations on the contradiction between coal and electricity. The company also accompanied research by the Price Division of the National Development and Reform Commission, the Planning Division of the National Energy Administration, the Coal Division, and the staff of the Electric Power Department. .

Liu Tienan pointed out in his investigation that “the current coal-fired power problem is largely a deep-seated contradiction in which extensive development methods and institutional mechanisms have yet to be improved. In the case of market-induced fluctuations in supply and demand, it is necessary to take both the Measures to ease and resolve."

Shanxi power plant loses three years

Liu Tienan chose the first station of local research in Shanxi.

Liu Tienan is a member of the People's Government of Jixian County in Shanxi Province. Before being transferred to the post of Director of National Energy, Liu Tienan was in charge of economic operation regulation and industrial coordination. He is familiar with the status quo of coal, electricity, and oil transportation.

According to officials of the Shanxi Provincial Government, “Liu Tienan’s investigation was to find out the situation. The loss situation of Shanxi Power has been highly valued by the Development and Reform Commission.”

According to a person in Shanxi's power industry, “(on-grid tariff) is raised by 2.6 cents per kilowatt-hour, which can only delay the operation of the power plant and is not a long-term solution. At present, Shanxi's on-grid tariff is about 0.1 yuan lower than the national average on-grid tariff.

According to the analysis of the above-mentioned sources, the continuous rise in coal prices and the serious inversion of coal-fired power prices are the main reasons for the huge losses of Shanxi's power plants. Prior to Liu Tienan’s investigation, 11 major power plants, including Shanxi Sheshan, Yuze, Zhaoguang, Taiyi and Taiji, have submitted emergency reports to the relevant authorities.

According to the report, “Sino-Southern power plants in Shanxi Province have suffered huge losses for three consecutive years, and their net assets have dropped sharply. The asset-liability ratio has been extremely high. Enterprises cannot afford to buy coal and can't afford electricity, and the business situation is deteriorating and it is already difficult to sustain. From 2008 to 2010, the above-mentioned 11 power generation enterprises had a cumulative loss of 9.709 billion yuan for three years.

Shanxi Yushan Power Plant is located in the Changzhi area and is one of the largest power plants in Shanxi Province, protecting the electricity in southeastern Shanxi. According to the person in charge of Lushan Power Plant, “The current coal price in Changzhi is 800 yuan/ton, and the unit fuel cost accounts for 93% of the power generation cost. With material and water fee costs, the variable cost has exceeded the electricity price. Alert line, always faced with downtime."

The Shanxi Provincial Electric Power Industry Association recommended that the National Development and Reform Commission should start the coal-electricity linkage mechanism as soon as possible for Shanxi and other provinces with serious losses in thermal power companies. In view of the low on-grid electricity price in Shanxi, it is proposed to adopt a small-step, non-stop approach, gradually increasing the on-grid tariff in Shanxi to a reasonable level within 3-5 years. The on-grid tariffs for power plants in different regions of Shanxi Province should be different according to different coal costs.

Electricity price reform suffers from inflationary pressure

Coal-fired electricity linkage restarts, and rising electricity prices are inevitable. However, under the current strong inflation expectations, price adjustment has become a sensitive word.

Although the increase in on-grid electricity price in Shanxi was not transferred to the terminal, the price adjustment cost was borne by the grid companies. However, it is generally expected that the increase in sales price will only be a matter of time.

"Upgrading the on-grid tariff and restarting the linkage mechanism of coal and electricity." is the most recommended proposal by Liu Tienan and his party.

At the end of 2004, the NDRC introduced a coal-fired electricity linkage system that stipulates that a coal price linkage cycle should take no less than six months. If the average coal price in a cycle changes by more than 5% from the previous cycle, the price will be adjusted accordingly. This policy was implemented twice in 2005 and 2006 respectively. Since then, "coal power linkage" was shelved.

The other key to coal-fired linkage is whether to increase the on-grid tariff or increase the terminal price.

The draft “12th Five-Year” special plan for electricity has been proposed. The country implements the joint sales price, that is, establishes the classified sales price that is linked with the electricity quality and the on-grid electricity price. The reason is that it will help save electricity and curb inefficient demand. Reasonably adjust the sales price.

According to the plan, the national average electricity sales price in 2015 will exceed 0.7 yuan/degree, and the average electricity price in 2020 will exceed 0.8 yuan/degree. From the perspective of planning and research, the increase in electricity prices is inevitable.

Under the premise of marketization of coal prices, electricity prices still rely on administrative controls and become increasingly rampant. Hu Zhaoguang, deputy dean of the State Grid Energy Research Institute, said: "To solve the contradiction between coal and electricity, we must not blindly rely on administrative measures, and it is not a long-term solution. Otherwise, the contradiction of power plant losses will appear repeatedly."

In Hu Zhaoguang's view, it is now a relatively suitable period to liberalize electricity prices and advance electricity price reforms.

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