The coal price war game is far from over, can the electricity price be adjusted to end the power shortage?

After the low-profile increase of 12 provinces on-grid tariffs on April 10, the National Development and Reform Commission recently announced that it will raise the prices of industrial and commercial electricity and agricultural electricity in 15 provinces and cities from June 1. The government’s “visible hand” seems to have temporarily ended the recent debate on electricity price adjustments. However, it is still unknown how much this move can alleviate the current power supply tension. At the same time, the impact of the price increase on current inflation will be a source of strong concern.

Electricity price increase to increase corporate enthusiasm

In fact, with the advent of the electricity shortage in the off-season, the market has already raised expectations for the price increase.

Although the cause of the power shortage is related to the increase in power demand, the rise of high-energy-consuming industries, and the lack of water and electricity supply in some areas, the long-term loss of thermal power companies has caused insufficient power generation and is still considered to be a direct driver.

According to the statistics of the National Bureau of Statistics, in January-March, the profit of the entire thermal power industry fell by 75.3% year-on-year; the sales profit rate was only 0.8%, down 3.1 percentage points from the same period of the previous year. According to the industry survey of the China Electricity Council, in January-April, the thermal power losses of Huaneng, Datang, Huadian, Guodian and China Power Investment Corporation totaled 10.57 billion yuan, a year-on-year increase of 7.29 billion yuan. The root cause of the loss is the rise in coal prices.

In recent years, the contradiction between “market coal and planned electricity” has become increasingly prominent. Data show that since 2003, Qinhuangdao 5500 kcal coal has risen more than 150%, while sales price has increased by only 32%. Since this year, the market coal price has continued to run at a high level, especially since April, the current Qinhuangdao 5500 kcal Coal prices have already risen above the 2008 peak. The China Electricity Council said that although the country has recently raised the on-grid tariffs of some provinces, the loss of thermal power companies has not improved due to the lack of implementation of individual provinces and the continuous increase in coal prices during the same period. In April, the thermal power business of the five major groups still lost 1.71 billion.

Obviously, if the on-grid tariff is not raised and the loss of the power plant is reduced, as the summer peak of electricity consumption comes, the tight supply situation will probably intensify. However, the relevant person in charge of the National Development and Reform Commission said that the price adjustment only considers the cost pressure brought by the rising coal price, and does not consider the losses caused by blind expansion of power companies and high energy consumption of power units. However, after the increase in the on-grid tariff, the sales price has also been adjusted, after the market has been a lot of controversy. Some experts believe that in the current severe price situation, the rise in terminal electricity prices will increase inflationary pressures. However, opponents believe that although the grid company has a certain profit, it is difficult to independently bear the rise in fuel costs, so the sales price will eventually be adjusted.

The NDRC raised the sales price, in addition to reducing the losses of thermal power companies and increasing their enthusiasm for power generation, another important reason is to curb the accelerated development of high-energy-consuming industries.

The coal price game is far from over

It can be seen from the adjustment of the two on-grid tariffs and sales electricity prices that the regions involved are mainly in the central and western regions where the electricity price is lower and the thermal power enterprises have the most serious losses. Among them, Shanxi Province has the largest increase, the on-grid price is up 3.09 points per kWh, and the sales price is 2.4 points per kWh.

It is understood that in the past few years, as a coal-producing province of Shanxi, the coal price is much lower than that of the coastal provinces, so the government has set a lower ex-factory electricity price. However, in recent years, due to the closure of a large number of small coal mines, the local coal price is almost the same as that in the southern region. However, the adjustment of the ex-factory electricity price is far behind other regions, resulting in the overall profit of the province's thermal power enterprises being lower than the industry average. According to industry insiders, even after the price increase, the power plant management dilemma can not be reversed.

In fact, in the contradiction between "market coal" and "planned electricity", there is a huge crux of the fact that among the coal prices that have been released from the market, the price of thermal coal is still controlled by the government. This is why in the process of rapid rise in coal prices, coal that is considered to drive down prices is often “transformed” into market coal in various ways, so that power plants have to buy high-priced coal from the market, and eventually costs rise. There is no money to buy coal. Not long ago, the National Development and Reform Commission issued the "Emergency Notice on Effectively Guaranteeing the Stabilization of Coal Prices for Electric Coal Supply", aiming at cracking down on price hikes in some places by adopting measures such as reducing the coal-fired contract redemption rate, lowering the calorific value, and tying up the market coal. the behavior of.

However, in the absence of rationalization of coal-fired electricity prices, the game is still difficult to end. Moreover, from past experience, rising electricity prices will often lead to a new round of coal price increases. In this regard, Lin Boqiang, director of the China Energy Economic Research Center of Xiamen University, believes that the increase in on-grid tariffs and sales tariffs should aim to alleviate the power shortage from both supply and demand. The premise is that the price of thermal coal contracts must be strictly regulated and cannot rise. However, he also said that in the case of thermal coal price limit and other coal types, the enthusiasm of coal supply will be reduced. It is a big administrative challenge to require coal enterprises to supply electricity coal according to the price limit.

“The price of electricity has two basic goals: the first is to pass price signals to help consumers and investors make the right decisions; the second is to ensure that regulated power companies can recover reasonable costs to ensure they are able to provide Electricity service. China's administratively controlled electricity price did not complete the first goal, nor did it complete the second goal." Lin Boqiang said.

Will not affect CPI for the time being

What is intriguing is that the NDRC raised the sales price very low-key, and the release of relevant news did not appear on the NDRC website. The reporter interviewed the relevant person in the department and learned that the decision on the adjustment of the electricity price was made at the internal ventilation meeting of the NDRC. The news was only authorized by the Xinhua News Agency. "How to publish and publicize this matter, we have to negotiate with other departments in the Ministry." Can be sure," the source said.

It is conceivable that under the current economic situation of high price pressures, the relevant departments are also cautious and conscientious.

However, since this tariff adjustment does not involve residents, the NDRC said that it will not directly affect the overall price level, and the indirect impact is very limited. Relevant experts believe that the price increase will first be reflected in the PPI, and then will be gradually transmitted to the CPI. However, if you do not adjust the price of electricity, let the power shortage spread, it may have a greater impact on prices. Because the demand remains the same, the supply side is reduced due to power cuts, which will put pressure on the price. In addition, the increase in power shortage will also lead to diesel shortage.

Regarding whether the price of residents will adjust this market concern in the near future, Lin Boqiang said that the possibility of a short-term increase is not big. The reason is that the current inflationary pressure is relatively large; on the other hand, the electricity consumption of residents only accounts for the whole society. About %, even if it is adjusted, it is not meaningful to ease the tension of power supply. However, he believes that as part of the overall electricity price reform, the implementation of residential ladder prices is still the future direction.  

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