It is expected to be released within this year! Coal power companies are in good hands
On September 14, a reporter from China Securities News learned from people close to the policy department that the coal power capacity electricity price reform policy that the market is concerned about is expected to be introduced within this year, or will be officially implemented from January 1, 2024. Coal power companies are expected to increase profits stimulated by the policy.
Industry insiders believe that with the continuous expansion of new energy installations, the capacity utilization rate of coal-fired power units may continue to decline, resulting in a decline in yield. After the capacity electricity price mechanism is clarified, all kinds of power sources (including coal power, wind power, photovoltaic, nuclear power) can compete fairly in the all-electricity market, determine electricity prices based on market conditions, and a new round of value reshaping of the coal power industry will begin.
The cost of capacity electricity is expected to be clarified
It is understood that the coal power capacity price mechanism is only applicable to the unified coal power units that are put into operation in compliance with the regulations. For coal-fired power units that do not meet the national requirements for energy consumption, environmental protection and flexible regulation capacity, the capacity electricity price mechanism will not be implemented.
In the future, the price of coal power capacity may be determined according to the principle of recovering a certain proportion of the fixed cost of coal power units. Industry insiders pointed out that capacity cost compensation needs to determine the capacity compensation cost that can be obtained by the unit after determining the compensation capacity, marginal investment cost, expected benefits and other parameters.
The reporter learned from the industry that the current annual fixed cost expenditure of coal power units during the operation period of the national coal power unit is about 330 yuan per kilowatt, if it is determined that the fixed cost proportion of capacity electricity price recovery in a certain area is 40%, the capacity cost compensation obtained should be 132 yuan per kilowatt. Due to the different levels of coal power transformation in different regions, the price level of coal power capacity and electricity is also inconsistent in different regions.
It is worth mentioning that the price of capacity electricity is not the same as the price of electricity.
Guo Lili, a utility analyst at Tianfeng Securities, explained that capacity electricity prices mainly reflect the fixed costs of power plants, which are closely related to the type of power plant, investment costs, loan repayment interest rates and depreciation methods. The electricity price mainly reflects the variable cost of the power plant, which is closely related to the cost of fuel and materials.
Taking Shandong Province as an example, in April 2020, it took the lead in proposing capacity compensation for coal-fired generator sets participating in the electricity spot market, and the compensation price was calculated according to the fixed cost accounting of the generator set, mainly including the depreciation of fixed assets and financial expenses of the unit, and the compensation capacity was converted according to the installed capacity considering the service life and usable state of the unit.
As for who bears the cost of capacity electricity prices, the reporter learned from a number of industry insiders that the future may be dominated by industrial and commercial users. The capacity electricity fee available to coal-fired power units may be determined according to the local coal power capacity electricity price and the rated installed capacity of the unit, and will be paid by the power grid enterprise on a monthly basis. The electricity cost of coal power capacity in various regions is included in the system operating costs, and may be shared by industrial and commercial users according to the proportion of electricity consumption every month.
Shandong Province has clarified in the 2020 and 2022 versions of the relevant policies on capacity compensation electricity prices that before the operation of the Shandong capacity market, the capacity compensation fee for generator sets participating in the electricity spot market is collected from the user side, including the electricity consumption of all market-oriented users in the whole network. According to the "Notice of the National Development and Reform Commission on Further Deepening the Market-oriented Reform of Coal-fired Power Generation On-grid Tariffs" and other documents, from October 15, 2021, except for residential and agricultural electricity consumption continue to implement government pricing, all industrial and commercial electricity users must enter the electricity market and purchase electricity at market prices.
Establish a capacity mechanism suitable for China's electricity market
The industry consensus is that with the transformation of the role of coal power, the single power market can only guarantee the recovery of the marginal operating cost of coal power units, and cannot reflect the capacity value of coal power units as a regulated power source. In order to ensure the long-term capacity adequacy of the power system and provide effective power generation investment signals, the use of reasonable capacity compensation mechanism will be the future development direction.
The installed scale of domestic new energy continues to increase, and the proportion continues to increase, but the advantage of coal power units is that their electromechanical characteristics can contribute important support to the stability and balance of the power system, so maintaining reasonable capacity of coal power units is of great significance to ensure the reliability of power supply.
郭丽丽认为，伴随新能源装机的持续扩张，煤电机组容量利用率或将不断下降，导致收益率下滑。如不妥善解决企业资本成本的回收问题，会对企业投资信心产生一定影响。因此，需要Establish a capacity mechanism suitable for China's electricity market。
Shenwan Hongyuan public utility analyst Zha Hao said in an interview with reporters that the more important thing in capacity electricity prices is to improve the revenue structure of coal power and improve the willingness of traditional power source construction. At present, coal prices are at a relatively low level, which is a good time window for the introduction of capacity electricity price policies.
At present, China is establishing a five-in-one comprehensive electricity market focusing on the medium and long-term market, spot market, auxiliary service market, capacity electricity price and carbon market, providing the most basic mechanism support for China's long-term new energy transformation.
"The construction of traditional power sources is indispensable. At present, new energy has gradually become the main body of electricity, which will reduce the utilization rate and expected benefits of traditional power sources (mainly coal power), and then reduce the willingness of traditional power sources to invest. Therefore, the construction of new power systems requires the establishment of a capacity cost recovery mechanism for traditional power sources. Cha Hao said.
Good for power operators and coal power equipment manufacturers
多家机构认为，煤电容量电价政策出台将Good for power operators and coal power equipment manufacturers等。“容量电价出台后将改善煤电机组收益结构，煤电运营商有望从周期属性逐步向公用事业属性切换，其估值有望提升。”查浩称。
Cha Hao said that the introduction of capacity electricity prices will solve the problem of insufficient willingness to build coal power and promote the process of policy construction and replacement of coal power units, so the coal power capacity electricity price policy will benefit coal power equipment manufacturers. In addition, the introduction of capacity electricity prices will solve the revenue problem under the low utilization rate of coal power, thereby promoting the large-scale implementation of flexibility transformation.
It is worth mentioning that at present, some provinces in China have begun to implement capacity electricity price policies, but due to the different energy structure and power supply and demand of different provinces, the capacity electricity price policies are also different. Shandong, Guangdong and Yunnan have already started pilots, and the industry expects that more provinces may introduce relevant policies in the future, and the profits of coal power companies are expected to increase.
In April 2020, the Notice on Matters Related to the Trial Implementation of Capacity Compensation Electricity Prices for Coal-Fired Units in the Electricity Spot Market stipulates that before the operation of the capacity market, coal-fired generator sets participating in the spot market will trial capacity compensation electricity prices, and the compensation fee will be collected from the user side, and the capacity compensation electricity price standard is tentatively set at 0.0991 yuan/kWh.
In December 2022, the Implementation Plan for the Market-oriented Reform of Coal-fired Power Generation in Yunnan Province stipulates that coal-fired power generation enterprises can participate in the regulated capacity market transaction between the maximum power generation capacity and the minimum power generation capacity, and the trial period will first participate in the market transaction of coal-fired power generation regulated capacity at 40% of the rated installed capacity of bituminous coal anthracite, and dynamically adjust it according to changes in market supply and demand.
