Thermal Power Loss of Seven Provincial Electricity Prices or Increases

The National Development and Reform Commission met with representatives of the five major power groups on September 14th and asked for advice on raising the price of electricity in seven provinces such as Shandong and Hebei. The news has been frequently reported in the recent period. A report released recently by Citibank pointed out that seven provinces including Shandong, Hebei, Shanxi, Shaanxi, Qinghai, Gansu, and Hainan have increased their electricity tariffs, and their on-grid tariffs for thermal power units have risen by RMB 15-25/kWh, with an average rate of 6.2 yuan. %, it is expected to begin implementation next month. The issue of the price of electricity that touched the national nerves and the increasingly prominent contradiction between coal and electricity have once again attracted the attention of the community.

“For a long time, the two price systems of “coal market and electricity plan” have made the contradiction between the two prominent. Coal companies can adjust prices according to market supply and demand, but the power generation enterprises are regulated by the government.” Any research institute of energy economics and management research center of North China Electric Power University The professor introduced to the "China United Daily" reporter that this was an important reason that led to the coal industry's annual losses in the entire industry, and it was also behind this "price increase."

Price adjustment information to be confirmed

“Although the seven provinces and cities have suffered more losses in the first half of the year than typical regions, under the current background of increasing inflation expectations, there is still very strong uncertainty about whether the price of electricity can be adjusted.” Han Xiaoping, General Manager, Beijing Qunying Investment Co., Ltd. The reporter said that regardless of whether the Citibank report said that the price of electricity can rise, it is undeniable that there has been a long-running "coal market, electricity plan," coal power upside-down phenomenon again caused people to think about thermal power.

When the reporter sought confirmation from China Huaneng Group, one of the five major power generation groups, on September 21, the other party stated on the phone that the increase in power price was a major issue and it was not convenient for the media to express their opinions before receiving the exact information. At the same time, Liu Yushu, director of the News Center of the State Grid Shandong Electric Power Group, also confirmed to the reporter that his Shandong branch had not received a notification that the country would raise the tariff next month.

However, prior to the media's confirmation to the Electricity Division of the Price Division of the National Development and Reform Commission and the Beijing headquarters of the State Grid, neither party explicitly denied it, saying that it was inconvenient to disclose information.

On September 8, Cao Changqing, Director of the Price Division of the National Development and Reform Commission, went to Guodian Group to investigate the operation of power generation companies. Analysts believe that Cao Changqing’s move has aggravated the electricity price adjustment expectations. At that time, Guodian Group reported that this year's group profit mainly came from non-electric industries such as coal, and the operation of thermal power plants was facing great difficulties. We hope that the NDRC will fully consider the practical difficulties faced by power generation companies, and Cao Changqing also responded that it will consider timely adjustment of electricity price policies.

“Under the current situation of coal power upside down, it is only a matter of time before the power price is raised again. However, considering that the CPI announced in August rose by 3.5% to a 22-month high, the Citibank reported that it is not optimistic. It is unlikely that the price of electricity will be able to be raised next month.” Professor He Yonggui estimated to reporters that there is a greater possibility that the country will raise the price of electricity before the Spring Festival next year.

CEC proposes price increase

Citibank reported that the seven provinces and power companies involved in the price adjustment had previously reported to the National Development and Reform Commission about the company's business operations: coal power was upside down, and thermal power losses were serious. He Yonggui and Han Xiaoping analyzed with reporters that the loss of thermal power was the reason that prompted the National Development and Reform Commission to brewing this partial price adjustment plan. If the price adjustment is true, then the China Electricity Council (hereinafter referred to as “CEC”)’s proposal in July. It may play a key role in the NDRC's decision-making.

“In the first half of the year, the installed capacity of domestic power generation was close to 900 million kilowatts, but the distribution of profits in the provinces was extremely uneven. The losses in the provinces in the central region were all over 50%.” This is the situation of China’s electricity supply and demand and economic operation in the country in late July. Analyze the data released at the forecast report meeting. The reporter learned from CEC that in the first half of this year, the overall profits of the power industry have achieved a recovery growth, but there are large differences between different industries and regions. Therefore, the "CEC" suggested that the coal-electricity linkage mechanism should be improved as soon as possible, and the implementation plan for coal-electricity linkage electricity prices should be proposed in different regions.

According to statistics from the National Bureau of Statistics, the total profit of the power industry increased from 15.5 billion yuan in the same period last year to 50.4 billion yuan. However, the profit distribution of the power industry provinces is uneven. The profits of the thermal power industry are mainly distributed in the three eastern provinces, accounting for 73% of the total profits of the thermal power industry in the country. The losses in the eastern and central provinces are serious. In the first half of the year, the loss of thermal power industry rose to 43.36%, an increase of 3.10 percentage points from the same period of last year, and the losses in the provinces of central China exceeded 50%. The overall profit margin of the electric power industry is low, at only 3.50%, which is 2.53 percentage points lower than the average national industrial sales profit rate. The power supply industry is particularly noticeable. The sales margin is only 2.28%, and the thermal power industry sales margin is only 3.92%.

Seven provinces have serious losses in thermal power

The seven provinces mentioned in the Citibank report are all areas with severe thermal power losses in the first half of the year, of which Hebei and Shandong have more typical loss of thermal power.

The installed capacity of thermal power generation companies in Hebei Province has shown that the operating profit was 68.254 million yuan, a drop of 63.08% from the same period of last year, and net profit also decreased by 73.36%. The main reason was that Jiantou Energy Holdings had an average unit price of 676 yuan/ton in the first half of the year, an increase of 16.75% over the same period in 2009.

One-half of the installed capacity of Huadian Power in Shandong in the first half of the annual report shows that its power generation and on-grid electricity have increased by about 25%, while the use of power generation equipment also increased, but the company's net profit was only 49.12 million yuan, a year-on-year drop of 93.18 %. The main reason is that the price of coal has risen sharply, leading to an 18.99% increase in fuel costs.

"The thermal power losses in the central and eastern regions are serious. The main reason is that the power grids in Henan, Shanxi, Anhui, and other pit power stations have traditionally had low on-grid tariffs. In recent years, the coal market has been used, and the country has used three orders and five applications to blow up some small coal mines with safety risks and transport coal costs. The increase in coal prices has led to a larger increase in coal prices, Han Xiaoping said in an interview with reporters.

“Internal news is due to the price increase of thermal coal, the five major power groups have jointly petitioned the relevant departments hope to adjust the price as soon as possible. The National Development and Reform Commission denied this news, but then issued a coal price limit order.” He Yonggui revealed to reporters, power companies listed companies The first half of 2010 was almost exhausted, and most of them showed that the thermal power sector suffered a loss or profitability. Perhaps it is the loss data in the annual report that has promoted the online power tariff adjustment programs of the relevant provinces and power companies in seven provinces and cities.

Increased cost of thermal power to promote the development of new energy

At present, thermal power is still a high energy-consuming energy development method. Under the current circumstances where the government's energy-saving emission reduction task is grim, in the future, if the price of thermal power is not raised, the power companies will be forced to save energy and reduce emissions, and promote new wind power, solar power generation, etc. in China. Energy development.

"At that time, enterprises have to eliminate energy-intensive equipment processes, use energy-efficient equipment, and invest in new energy power generation methods, which will help China's power industry to change its development mode more quickly." He Yonggui told reporters that new energy generation At present, it is not yet very mature, but this is an inevitable trend of future replacement of thermal power and changes in China's energy structure.

He Yonggui and Han Xiaoping, who are insiders in the industry, told reporters that the cost of wind power and solar power is higher than the cost of thermal power generation. However, from a dynamic point of view, due to the limited proven reserves of coal and the gradual increase in the amount of coal extracted, the cost of mining will increase. The higher the cost, the cost of thermal power generation (fuel costs) will continue to rise.

For new energy sources such as wind power and solar power, the biggest obstacle is that the initial investment is huge and the investment recovery period is relatively long. However, once these new energy projects are put into operation, the maintenance and operation costs are relatively low, which can be described as “a profit-making” business. Wind power, solar power, its power is the "wind" and "solar heat." In addition to the construction of supporting power grid, to solve the problem of new energy power generation to access the Internet, it itself has no cost. At the same time, there is a problem with emissions from thermal power generation, and wind power does not. All this means that the cost disadvantage of new energy in the future relative to thermal power will eventually cease to exist over time.

“As the focus of energy development further moves westward and moves northwards, China’s long-distance, large-capacity, low-loss transmission network construction can predict that future wind power, solar power and other new energy sources will have a great impact on changing China’s current excessive dependence on thermal power. The change." He Yonggui said to reporters.