[Energy people are watching, click on the upper right corner to add 'Follow'] The evolution of electricity prices and the process of electricity reform go hand in hand. Electricity has physical characteristics such as being unsuitable for storage, intangible, and homogeneous. The

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The evolution of electricity prices has closely followed the process of electricity reform

Electricity has physical characteristics such as unsuitable storage, intangibility, and homogeneity. The power system operates with continuous and uninterrupted real-time balance of generation, transmission, distribution and consumption; transmission and distribution have natural monopoly; for consumers, electricity can be taken and used immediately, and it is essentially the only necessity that is continuously consumed by users and is substitutable. and poor demand elasticity in the short run. The vertically integrated monopoly model of the power system has existed for a long time.

(Source: China Electric Power Enterprise Management Author: Zhao Kebin)

In the 1980s, with the development of key technologies such as communications and information, as well as the formation of the theory of "separation of network and transportation", people questioned the vertical integration monopoly model. From the era of regulation to the era of deregulation. In our country, the separation of factories and grids, bidding on the power generation side, and direct purchase of electricity by large users have actually become the first step in deregulation and a breakthrough in the reform of the electric power system. Electricity marketization has become a possible, feasible, and even inevitable option. The institutional structure of "controlling the middle and letting go of both ends" is both a domestic policy and an international consensus. Electric power reform must distinguish between natural monopoly and competition, implement government control over the natural monopoly link of power transmission and distribution, and form effective competition in the power sales link.

As a special commodity, the history of electricity prices is closely related to the uniqueness of electricity. Understanding and mastering the historical evolution of electricity prices will help us understand and grasp the background, significance and direction of some electricity price policies in the current electricity price reform process, so that we can better deal with thorny issues related to the reality of electricity prices, such as time-of-use electricity prices and demand response. Establishment and improvement of mechanisms.

With the development of the electric power industry and the advancement of electric power system reform, the electricity price formation mechanism has also gone through a long process of continuous evolution. On-grid electricity prices on the power generation side have successively appeared in mandatory electricity prices, guiding electricity prices, benchmark electricity prices, coal-electricity linkage electricity prices, market competition on-grid electricity prices, etc. The electricity side has long-term implementation of classified catalog electricity prices. On the basis of dividing users into residential electricity, agricultural production, industry and commerce, and other electricity categories, each type of user is priced according to voltage level; at the same time, the user side implements There are single-unit electricity price and two-part electricity price. The two-part electricity price consists of two parts: electricity price and basic electricity price. In addition, various regions have also introduced different time-of-use electricity prices. Low electricity prices and cross-subsidies are implemented for residents' daily electricity consumption. This is another feature of my country’s electricity price policy. In short, before the power market reform, my country's on-grid electricity prices and sales electricity prices have long been subject to government pricing, unified policies, and hierarchical management.

The first round of power system reform started in 2002 with "separation of factories and grids" as an important symbol. Although the vertical integration monopoly model has been changed, the market mechanism is still missing. The transmission and distribution price has been absent for a long time. The average sales price of electricity is different from the average The difference in on-grid electricity prices is the profit model of the power grid; with the issuance of "No. 9 Document" and its supporting documents, a new round of deepening reform measures has been comprehensively promoted, and the power transmission and distribution price assessment work has been fully and rapidly rolled out across the country, and power grid companies have become " As a provider of line business, its profit model has gradually changed since then. There is no doubt that the independent determination of electricity prices in the transmission and distribution links and the market formation mechanism of electricity prices in the sales link are basic features of the electricity market.

The catalog time-of-use electricity price is similar to the spot real-time electricity price.

In the early 1980s, with the gradual widening of the peak-valley difference in the power system and the shortage of electricity, my country gradually implemented the catalog time-of-use electricity price mechanism in various places. The time-of-use electricity price mechanism is designed based on the time value of electric energy. It is an important mechanism designed to guide power users to cut peaks and fill valleys, and to ensure the safe and stable economic operation of the power system. Time-of-use electricity price mechanisms include peak and valley electricity price mechanisms, seasonal electricity price mechanisms, etc. The peak and valley electricity price mechanism divides the electricity price of a day into peaks, flat periods, and troughs. The seasonal electricity price mechanism differentiates the electricity price according to summer, non-summer, etc., so as to give full play to the role of electricity price signals and guide electricity. Users try to use less electricity during peak hours and more electricity during valley hours, so as to achieve the purpose of shifting peak hours and filling valleys, easing the contradiction between power supply and demand, and ensuring safe power supply.According to statistics, 29 provinces across the country have implemented different time-of-use electricity price mechanisms. Most provinces divide peak, flat and valley periods on a daily basis, and implement peak and valley time-of-use electricity prices. On this basis, some provinces add peak periods; Sichuan and other places divide wet and dry periods on a monthly basis, and implement peak and dry electricity prices; Shanghai and other places The region implements higher seasonal electricity prices during the peak electricity consumption period in mid-summer.

Accelerating the construction of an effective competitive market structure and market system is the core goal of this round of deepening the reform of the electric power system. The electricity market consists of the medium- and long-term market and the spot market. Generally speaking, most electric energy transactions can be conducted in a bilateral manner through the medium and long-term market. However, for power plants and users, these medium and long-term electric energy transactions inevitably face imbalance problems during actual delivery and settlement. . In order to make up for the shortcomings of the medium- and long-term electric energy market and solve the problem of imbalance between load and power generation during actual electric energy delivery, a centralized management spot market needs to be established to provide a compensation mechanism for imbalanced amounts. This necessity is one of the reasons for establishing a power spot market. The price of electrical energy commodities that reflects time and location characteristics is another important function of the power spot market. Electric energy transactions in the mid- to long-term market are mainly bilateral. Financial derivatives such as physical contracts, contracts for difference, and futures are used to avoid price fluctuations in the spot market, providing a method for both parties to share price risks. The spot market electric energy transaction implements a centralized bidding method, which takes into account the actual safety constraints and reliability of the power grid, embodies and meets the special physical attribute conditions and requirements of power system operation, and realizes a market for resource optimization allocation, real-time balancing and power system dispatching and operation. ization; a clearing method called system marginal price is widely used in the power spot centralized competition market. Through centralized bidding and unified clearing, the time price signal and location price signal of electricity are discovered, which forms the so-called real-time spot market. price.

Promoting the healthy development of the electric power industry is the original intention and mission of the electric power market, and the price formation mechanism is the core of the electric power market. Discovering power prices and achieving power balance are two basic issues to be solved in the power market. The real-time spot electricity price can fully reflect the marginal power generation costs and supply and demand conditions at different times and locations. Through the market's price discovery function and the reaction of price on supply and demand, the spot real-time electricity price can guide users to rationally use electricity and respond to demand, and promote the new zero-marginal cost model. Energy consumption, realizing the optimal allocation of resources, and solving the problem of balancing power supply and demand. In the long term, an electricity market with effective competition can also effectively guide the investment and construction of power supply and power grids, promote the optimization of power grid and power supply structures, and avoid the cycle of power surplus and shortage.

When traditional energy dominates the world, the spot price curve and the load curve are highly consistent; due to the addition of new energy, high load does not necessarily mean high electricity prices, and low load does not necessarily mean low electricity prices. Especially as the proportion of new energy power generation installed capacity and power generation continues to rise, it has had a profound impact on the operation of the power system and the power market. The high proportion of new energy puts forward very high flexibility adjustment requirements for the system, and also intensifies spot price fluctuations, causing the balance of the power system and the real-time electricity price in the spot market to change from "single random" on the user side to "single random" on both sides of the generator. "Double Stochastic", the consistency phenomenon between the spot price curve and the load curve has been completely changed and subverted; the price trend of the spot market with a high proportion of new energy is basically determined by the power generation output of new energy. The original catalog time-of-use electricity price policy faces problems such as difficulty in optimization or even failure, and may cause resource misallocation and inefficiency, and its effect is seriously affected and distorted.

Different from the real-time electricity price with time mark and location attributes in the electricity spot market, my country's current time-of-use electricity price mechanism belongs to the scope of government pricing and catalog electricity prices. The deformed plan is not a market. The process of electricity market reform must be accelerated and replaced by market means. Planning means, establishing and improving the market-oriented formation mechanism of electricity prices, and replacing catalog time-of-use electricity prices with spot and real-time electricity prices is the general trend.

The demand response mechanism needs to be accurately designed and honed in practice

Constructing an electric power spot market is an important part of deepening the reform of the electric power system, improving the electric power market system, and promoting electric power marketization. In 2017, my country selected 8 provinces to launch pilot projects for the construction of electricity spot markets, and in 2021, 6 provinces were selected to launch the second batch of spot pilot projects. Gansu power spot market pilot practice has proved that in the market with a high proportion of new energy, due to the power generation characteristics of new energy, the "supply-end" characteristics have also been completely changed. The changing supply characteristics determine the changing price characteristics, and the "floor" The frequent "polarization phenomenon" between "price" and "ceiling price" makes the electricity market with a high proportion of new energy unique and different from any other market.

For the electricity market, it is very important to establish a demand response mechanism. International experience shows that only when the user side substantially participates in the wholesale market can price increases be limited, power grid operation reliability improved, and market supply and demand always maintained in balance. The spot market can guide power generation companies to proactively adjust peaks through real-time electricity price signals, lay a mechanism foundation for the implementation of demand response, optimize and coordinate the regulation resources of the entire network, effectively promote the consumption of renewable energy, and reduce wind and solar curtailment.

has no spot and no market. It is recommended to comprehensively promote the construction of the electricity market, especially to accelerate the construction of the electricity spot market, accelerate the promotion of all industrial and commercial users to enter the market, and completely cancel the industrial and commercial catalog sales price and catalog time-of-use electricity price policies as soon as possible. The electricity spot market pilot area must stop the catalog time-of-use electricity price policy, and all industrial and commercial users, including those who have not yet purchased electricity directly from the electricity market and are purchased by power grid companies as agents, must enter either the wholesale market or the retail market. In some spot pilot areas, all the power generation side participates in the spot market, while the user side participates in the spot market on a small scale, resulting in a large amount of unbalanced funds in the spot market, as well as the inability of spot electricity prices to be transmitted to users, and a unilateral zero-sum game situation on the power generation side. The phenomenon must be corrected and changed immediately.

We must attach great importance to the innovative design and innovative practice of the market mechanism of good interaction between source, grid and load in the new power system environment with new energy as the main body. Fully rely on and utilize the functions and mechanisms of the spot market, guide the balance of supply and demand and various demand responses through real-time spot prices, play a complementary role, and better guide the good interaction between source, grid, storage and load. For users entering the wholesale market, CFDs themselves protect real-time incentives. A contract for difference refers to a contract with financial settlement at maturity rather than physical delivery, and has financial attributes. Spot prices in the electricity market can fluctuate greatly, and CFDs provide a simple financial contract tool for implementing fixed electricity price contracts. CFDs are aimed at both generators and users. After locking the volume and price curve through forward contracts, the risk arises from changes in the power curve. For users, use less or not when the price is high, and conversely use more when the price is low; for power generation , more is issued when the price is high, less or not issued when the price is low. From the perspective of power production and grid dispatch, two-way CFDs are beneficial to the balance of power generation and consumption in the power system.

Retail competition is an advanced stage of the electricity market. Peak shaving is an important manifestation of the role of demand response, and the demand response of the retail market cannot be ignored. Although demand response does not presuppose the establishment of a competitive retail market, demand response is an important bridge connecting the wholesale market and the retail market, opening up the connection between the node marginal electricity price in the wholesale market and the dynamic electricity price in the retail market; As the proportion of intermittent renewable energy generation such as wind power and solar energy in the power grid increases, demand response will play a very important role in the consumption of renewable energy. Price-responsive load resources will provide the valuable flexibility required for system operation. It provides the key elements for two-way interaction between source and network loads and efficient coordinated operation of the system.For industrial and commercial users who choose to enter the retail market and those who are temporarily unable to enter the market, guide and urge electricity sales companies or e-commerce agents to establish multiple types of retail packages suitable for different users. On the basis of fixed prices for retail packages, encourage retail sales Businesses and retail users sign a flexible time-of-use electricity price retail contract that is linked to the real-time spot price, coupled with response, and in line with the principle of incentive compatibility.

Time-of-use metering is very important and necessary because it is a necessary condition for demand response. Except for a very small number of scattered users, it is recommended that all users implement time-of-use metering so that they can withstand market price fluctuations, so that users can more independently decide when to use electricity and how much to use. Such demand response should be encouraged while also reducing risks for retailers.

is similar to the positive role of spot real-time electricity prices in promoting demand response. The time-of-use electricity price under the demand response of retail users in the retail market is a complete market pricing and a true time-of-use response, because it is based on the spot real-time electricity price. Basically, this is completely different from the current government-priced catalog time-of-use electricity prices. Compared with the time-of-use electricity price and spot real-time electricity price under the demand response of retail users, the current catalog time-of-use electricity price has obvious shortcomings. This time-of-use price or segmented price is not determined by the market, and the time-of-use electricity price determined by the market is volatile. . Artificial segmentation and pricing make it difficult to accurately grasp the actual supply and demand changes in electricity, making it difficult to achieve price accuracy, thus greatly reducing its role in promoting demand response.

In some spot market pilot areas, the retail market has not established an effective demand response mechanism. Due to the immature development of the retail market and the unreasonable design of retail contracts, only traditional rigid, overly conservative, and unchanging fixed-price retail packages have made retail users unwilling and unmotivated to carry out demand response, thus affecting the development of the retail market. Compete effectively. In order to realize the demand response of retail users and reduce the market risk of retailers, some places have unreasonably used the catalog time-of-use electricity prices with obvious flaws in the current government pricing for use in the medium and long-term market. It is obviously a wrong use of the place. As a result, Counterproductive.

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