The Practice of Generation Schedule in China Power Market

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CHINA ELECTRIC POWER RESEARCH INSTITUTE
The Practice of Generation Schedule in China
Power Market
Dr. Xiaomin Bai China Electric Power Research
Institute bxm_at_epri.ac.cn
2007-09-19
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1. The Status of Power Systems 2. Reform
Procedure 3. Generation schedule method
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System Interconnection
1.1 The Status of Power Systems
NE
AC
NC
XJ
DC
NW
AC
SD
AC
Back to back
Back to back or DC
Back to back
CC
SC
EC
3DC
AC
AC
DC
DC
XZ
Back to back
SC
FJ
sea cable
HaiN
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1.2 2004 Max Demand of 7 major systems
Max Demand 285120 MW
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1.3 Capacity and yearly Increments
Install Capacity GW
Increment of Capacity
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1.4 Major Benchmarks of Generation Capacity
1987 -- 100GW 1995 -- 200GW (1996 Rank 2 in
the world ) 2000 -- 300GW 2004 -- 400GW 2005
-- 500GW 2006 -- 622GW
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1.5 Power system development

• The power industry grows in a very fast rate, by
  the end of 2006, the total installed generation
  capacity reached 622GW,the total annual energy
  production reached 2,834.4 TWh ( increased
  13.4), both ranked second in the world.
• However, China has experienced both energy
  surplus and energy shortage in the history.
  During 1997-1999, the power capacity in China was
  so much that some plant had to shut down half of
  their units.
• On the other hand, in 2003-2005 China has been
  suffered by energy shortages, 26 provinces had to
  shed load in the worst situation.
• Since large amount of generation plants will be
  installed, we expect the energy shortage problem
  will be alleviated in 2007.

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1.6 Power Systems development
Main reason is owing to the peak demand can not
be satisfied during some periods in some
regions. In year 2003, installed capacity
increased 7.8, however the power demand
increased 7.6 more than the capacity. The
situation of power supply shortage continues in
year 2004. The investment of generation speed up
obviously. The installation of Capacity expected
to increase around 30GW40GW each year. In fact,
it was 65GW in 2005 and 100GW in 2006. The target
of 950GW in 2020 can be reached earlier than
expected.
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2.1 Reform Procedure

• Started deregulation in late nineties. 6
  provincial power markets were in trial operation
  in 1999-2000. Their experience were useful for
  further development.
• In 2002 an order was issued for power industry
  reform. Restructure of Chinese power sector has
  been completed in 2003. SGCC, CSGC and 5 power
  generation groups are formed, 5 regional grid
  companies are established in the SGCC.
• Regional grid companies are required to establish
  regional Electricity Dispatch and Trading
  Centers. In 2004 NE China and E China has
  established their dispatch and trading center
  and in trial operation, other centers will be
  established in 2-3 years.

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2.2 Generation status

• The rational of total of 5 generation groups is
  38.79
• Other central government controlled enterprise is
  about 10
• Local government controlled enterprises is 45
• IPP is 6.21
• Most of units are state owned and controlled, it
  is about 90?

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2.3 Transmission and Distribution systems

• provincial level 31, regional level 7, monopolize
  controlled by SGCC 80 and CSGC 20.
• district and county level 3211, most of them are
  controlled by SGCC and CSGC.
• hierarchical controlled system 5 level, one
  national control center, 6 regional control
  center, 28 provincial center (except
  Beijing,Tianjin, Tibet), about 3000 district and
  county center.
• 10kV and above customers are reached 1M

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2.4 System Install and Load Balance Status

94-97 simulation
98-01 Pilot Provincial
02-simulation Regional PM
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2.5 System Install and Load Balance Status
alleviated
Still experience shortage
Serious Energy shortage
2004
2005
2006
2007
0115 NE-PM
Energy saving dispatch
0403 EC-PM
04 SC-PM
CC-PM Construction.
NC, NW PM Research
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2.6 regional power market

• NE China Grid Company has been the first regional
  power market in China, it is characterized as a
  sole wholesale power market in the region.
• The second regional power market is East China,
  it is characterized as a hierarchical power
  market, in which provincial power markets would
  coexist with regional power market.
• Other regional power markets will fall into
  either NE mode or East China mode.

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2.7 North China Power Market

• By the end of 2002, capacity of the region is
  39400MW,with hydro 5410MW,about 13.7,thermal
  33990MW,about 86.3?peak unit, frequency adjust
  units and security reserve units is
  4282.5MW,about 11.10.
• The installed capacities for different Generation
  groups 5 groups 19429.5MW,50.35. Huaneng
  5025MW,13.02 Datang1925MW,4.99Huadian
  5757MW,14.92Guodian 3261.5MW,8.45Zongdiantou34
  61MW,8.97.
• By the end of 2005, capacity of the region is
  43840MW,with hydro 5780MW,about 13.7,thermal
  37730MW,about 86.3?Wind power 340MW.

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2.8 The Main Features of NE

• Initiated simulation operation on Jan. 15, 2004
• Unified control system for the regional system,
  the three provincial system are considered as
  settlement center
• Annual and monthly bidding for generations are
  tested.
• Three stages for the market model single buyer
  model, 20 of total generation competition, two
  part tariff and full generation competition, in
  the future, one part tariff and full generation
  competition,

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2.9 East China Power Market

• In end of 2006, capacity of the region is
  97184.1MW,with hydro 1234.45MW,about 12.7,
  thermal 7748.84MW, about 79.7,others 7.55,
  including wind, pump, nuclear and gas turbine.
• 79 utilities with 229 units, the differences of
  installed capacities for Generation groups are
  not too much, the largest group, Zhejiang energy
  group 12.3

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2.10 Installed Capacity EC
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2.11 East China Power Market

• Initiated simulation operation on May 2004
• 171 registered units, 59 power plant, bid for
  power, others (41 unit maintains, 21 without
  bidding systems and 3 do not attend competition),
  43388MW , about half of total capacity.
  Provincial system buy power from regional market.
  About 10 generation is settled according market
  price. Partial generation competition, 85 annual
  contract, and 15 by competition.
• Trial operation on April 2006
• 221 registered units belong to more than 70
  utilities, 156 of them bid for power, 60000MW,
  Full generation competition plus CFD model. About
  10 generation is settled according market price.

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2.12 The Main Features of EC

• Regional market system, the three provincial
  systems are considered as settlement center.
• Provincial systems act as buyer to purchase
  generation from regional control center.
• Mainly contract trading, auxiliary spot trade.
  Annual and monthly contract bidding, day ahead
  spot market and real time system balance.
• Regional trade center and provincial settlement
  center, monthly contract bidding performed at
  regional trade center, annual contract and real
  time balance are performed in provinces
  respectively.
• Initial stage market model single buyer model,
  20 of total generation competition, two part
  tariff and full generation competition, are
  considered in the future.

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2.13 The Main Differences

• North China system mode annual and monthly
  trading, full generation competition, two part
  tariff.
• East China system mode annual contract and
  monthly trading, day ahead trading, full
  generation competition, however only part of
  generation are settled according to biding(90 by
  approved price, 10 by competition, one part
  tariff.

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Main feature of 3 Power markets
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Main feature of 3 Power markets
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3. Generation Schedule Methods

• The 11th five years national plan, energy
  consumption of the unit GDP and pollution would
  decrease 20 and 10 respectively compared with
  year 2005.
• Two important dispatch ideas along with the
  limitation of small units, and economic dispatch
  method
• Generation right trading
• Energy saving dispatch method

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3.1 Generation Right Trading

• Small units (capacity less then 100MW) has
  reached 115 GW in China. The average coal
  consuming for 25MW units is more then
  500-510g/kWh, but the average coal consuming of
  generator with the capacity more then 600MW is
  only 350 g/kWh.
• Shunt down small units for energy saving and
  environment protection
• The ongoing dispatch method is based on
  generation hours determined according different
  units. It may cause some problems. to solve the
  problem of un-economic results owing to
  generation bidding.
• Generation right trading is to adjust the
  generation allocation among different units

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3.2 Generation Right Trading

• Two ways for generation right trading
• Small units negotiate with large units to
  transfer its generation rights based on the
  market rules.
• Automatic generation right transfer, that is, in
  order to perform scheduled generation amount or
  contract quantity, when the market clearing price
  is lower than that of the contract, buy the
  generation from the market, it own units are
  shutdown, therefore the high efficiency units can
  generate more.
• The main features of generation right trade
• Generation resources configuration optimization
• Promote the shunt down of the small units and
  proper compensation for the staff of small units
• Energy saving and cost reduction. with the
  transfer of generation rights trade, the
  efficient thermal units and hydro units can gain
  more generation amount which is benefit for
  environment and utilize of renewable energy
  sources.

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3.3 Energy saving dispatch method

• Proposed in Aug.28, 2007.
• Units are dispatched according to the priority
  within provincial system, and optimized within
  the regional system, and will be coordinated
  amount regional systems. 
• The principle of the method energy saving,
  environment protection and economic. According
  the determined priority, the units are
  dispatched. First for renewable energy, then
  synthesized energy utilization units, then the
  coal units based their cost and pollution level.
  Wind power, solar power, tide power, hydro power,
  biologic power and nuclear power are dispatched
  in high priority.
• The thermal power units are dispatched according
  marginal cost of coal consumption. Parts of
  provincial system are selected for trial
  operation. will be promoted after the experiences
  are obtained.

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3.4 Energy saving dispatch method

• The priority of the generation for different
  units
• Wind power, solar power, tide power, hydro power,
  etc. the renewable units without adjust
  capability.
• hydro power,biologic power and earth thermal,
  etc. the renewable units with the adjust
  capability and waste generation units satisfied
  environment requirements.
• nuclear power
• cogeneration units, generation according to
  thermal requirements for generation, and the
  units using the abundant thermal, gas, pressure
  synthesized utilization generation units.
• nature gas and IGCC units
• other thermal units, including cogeneration units
  without thermal load
• Oil units
• The same type units are ranked according to unit
  consumption of energy cost, the same level unit,
  the lower of the pollution, the higher of the
  priority
• The generation price is not changed temporarily..

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3.5 The meaning of the method

• Energy saving dispatch plus closed 50GW small
  units, it is expected that the saving of the coal
  for each year before 2010 is about 90M ton,the
  associated emission of SO2, CO2 and NOx can be
  reduced greatly.
• The generation hours for low efficiency and high
  pollution units should be reduced. Small units
  and oil units may face the difficulty to run for
  generation. The modern high efficiency large
  units may have higher utilization rate.

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• Since energy resources are concentrated in the
  western part of China, and most industrial areas
  are located in the eastern part of China, huge
  blocks of power will be transmitted from the west
  to the east via long distance transmission
  corridors.

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• Two important things may affect power system
  pattern and its perspective of power market
• By installing more generation and transmission
  lines and limiting of investment for energy
  intensive industries as well as by implementation
  of various demand elasticity measures, it is
  predicted that the energy shortage problems will
  be alleviated by 2006-2007 (rate of progress).
• The construction of Ultra-high voltage
  transmission line and system (system management
  pattern).

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An example for market price
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The market price

• NC market
• 2005.5 month competition, 27plant, bidding
  generation 3785 MWh for the generation of
  1884MWh. The average 270.092 / MWh
• EC market
• Generation biding by units, 96 time periods, 10
  section generation bidding for each time period.
• Market clear price just higher than marginal cost
  of average cost of the generation untilitis.
• Price for generation of 5 generation groups
  317.93 /MWh, Transmission and distribution 153.4/
  MWh, 30.72 of sale price,the average sale price
  is 499.04/ MWh,uplift funds not included, average
  27.83/ MWh)

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(No Transcript)
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Contract price and competition price
The market clearing price for competed generation
may different from contract price, higher or
lower. For example in Longjiang system, the
average power generation for competition is
3270MWh. Contract price RMB300.74/MWh, competed
generation price is RMB111.5/Mwh. The price for
generation in competitive market may higher than
the times compared with the cases in normal
system operation.
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Contract allocation method may affect competition
results Allocate contract generation with the
rate of load demand
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Contract allocation method may affect competition
results Allocate contract generation by
optimization
?????????????
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Thank You Dr. Xiaomin Bai China Electric Power
Research Institute bxm_at_epri.ac.cn