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High-Voltage Test Transformer — Top-Level Design for SOE Reform Released, New Electricity Reform “Transmission and Grid Separation” Clarified

Is the positioning of the power grid focused on public utilities?

After the new round of electricity reform in some places, including the pilot plans for transmission and distribution price reform in Shenzhen and Ningxia, were successively announced, the industry is still paying attention to the extent to which the detailed rules supporting the electricity reform will implement the electricity reform document (Zhongfa “Document No. 9”).

When the state approved the Shenzhen plan for the new transmission and distribution price reform, it stated, “Grid companies obtain income by charging grid usage fees. The level of electricity generation and sales prices is unrelated to grid income, so grid companies have no conflict of interest with generation and sales companies. In direct transactions between generation companies and electricity users, they will maintain a neutral position. On the one hand, this avoids interfering with the effective operation of the electricity market; on the other hand, it will focus more on the operation and development of their own transmission and distribution business.”

That is, in the case where transmission and distribution in the power industry are not separated, further clarify transmission and distribution costs and strengthen supervision of the “middle”. For grid companies, the biggest change is to shift from the previous model of unified purchase and sales, earning price differences, to obtaining income by charging grid usage fees.

In “Document No. 9”, it is clearly stated that “controlling the middle, liberalizing both ends” is the institutional framework of the electricity reform, and further proposes to orderly liberalize some electricity links, “orderly liberalize competition outside transmission and distribution, open distribution and sales businesses to social capital in an orderly manner, and orderly liberalize power generation and consumption plans outside public welfare and regulatory ones.”

At the same time, it also proposes “promoting the relative independence of trading institutions and strengthening government supervision”. Since then, this year, the industry has been paying attention to how the supporting documents for the electricity reform will implement the “Document No. 9”.

The implementation rules are also called supporting documents for the electricity reform, generally considered to include six major aspects: transmission and distribution price reform, electricity market construction, trading institution components, liberalizing electricity consumption plans, sales-side reform, and supervision of self-owned power plants. A researcher who participated in the supporting documents told a reporter from Financial Daily that at the detail level, there is intense game-playing among grid companies, power generation companies, and local governments. For example, after the liberalization of electricity sales, what exactly are the thresholds, and whether and how grid companies can participate in electricity sales are not uniformly agreed upon.