The Reform and Development of China Power Industry

1
Reform of Electricity Industry Construction of
Electricity Market In China

Northeast
Zhang Diansheng Market Trade Dept.
Northwest
North
Sitsang
East
Centre
Taiwan
South
2
Reform of Electricity Industry Construction of
Electricity Market In China
Contents

• Introduction of CSG
• Part A Reform of Electricity Industry in
  China
• part B Construction of Electricity Market In
  China
• - Northeast Electricity Market
• - East Electricity Market
• - South Electricity Market

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Reform of Electricity Industry Construction of
Electricity Market In China

• By the end of 2006
• Power supply population (million) - 230
• Total asset (billion ) - 380
• Sales (TWh) - 397.3
• Revenue (billion ) 284
• Rank in top 500 world enterprises - 237th

CHINA
Sales (TWh)

• Covering 5 provinces
• Guangdong
• Guangxi
• Yunnan
• Guizhou
• Hainan
• Area (km2) 100 million

Year
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Reform of Electricity Industry Construction of
Electricity Market In China
Reform of Electricity Industry in China
Part A

• The reform fell into 3 stages
• - 1st stage 1980s1990s
• - 2nd stage 19952002
• - 3rd stage from 2002 to today

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Reform of Electricity Industry Development of
Electricity Market In China
Diversification of electricity investment
1st stage
Source of funds Central Government
Power shortages
Source of funds - Central government -
Local government - Foreign capital - Other
capital
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Reform of Electricity Industry Development of
Electricity Market In China
Separation of plant and grid Separation of
government and enterprise
2nd stage
-1997 State Power Corporation was
established -1998 Ministry of Electric Power was
cancelled
- The policy on the reform of electricity
industry was promulgated - Bidding for
dispatch was first experimented - The general
scheme of the reform was begun to research.
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Reform of Electricity Industry Development of
Electricity Market In China
Electricity Sector Reform Project was approved
3rd stage
In 2002 - Electricity Sector Reform Project
was approved. - State Power Corporation
recomposed to two grid corporations, five
generation companies and four assistant groups.
- State Electricity Regulation Commission was set
up
- The construction and regulation of the Chinese
power market was started
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Reform of Electricity Industry Construction of
Electricity Market In China
Construction of Electricity Market in China
Part B

• Since 2002, active progress has been achieved
• - Northeast east market In trial operation
  
• - South market In simulative operation
• - Central market A construction scheme is
  completed
• - Northwest north market Construction
  schemes are
• being studied

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Reform of Electricity Industry Construction of
Electricity Market In China
In the past

• Single-buyer
• Whole energy competition
• Two-part price

NORTHEAST ELECTRICITY MARKET
In the future

• Main model of trading Mid-long-term contract
  trading
• Partial energy competition
• Generation right trading
• The direct power-purchase for large customer in
  the market

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Reform of Electricity Industry Construction of
Electricity Market In China
In the past
Now

• Multilateral trading
• Whole energy competition CFD
• One-part price
• Yearly / monthly / day-ahead

• Settlement LMP

?/ MWh
Bidding
EAST ELECTRICITY MARKET
MCP
Bidding
MWh
In the future

• Trading monthly
• Bilateral trading
• Generation right trading

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Reform of Electricity Industry Development of
Electricity Market In China

• Multilateral trading provincial power grid
  companies power producers
• Partial energy competition 15 of all bidding
  units scheduled energy
• One-part price
• Up and down matching
• Yearly monthly

Price upper limit
Settlement
SOUTH ELECTRICITY MARKET
Price lower limit
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Reform of Electricity Industry Development of
Electricity Market In China
Energy-saving Dispatching

• Policies on saving energy and cutting emissions
  in 2007
• Energy-saving dispatching in several provinces
• Energy-saving dispatching will impact on the
  electricity market in the future

Thermal
Renewable
Hydro
Nuclear
Thermal
Standard coal consumption per kWh of the power
plant
13
Reform of Electricity Industry Development of
Electricity Market In China
The End THANK YOU
2007/10/15