How to break the deadlock of power system reform

In recent years, the contradiction between coal and electricity has become increasingly fierce, and local "power shortages" have occurred one after another. There are many discussions on the reform of power system in all walks of life, among which there is a high voice for power grid enterprises to break monopoly, separate transmission and distribution, and dispatch independently to realize power market competition and electricity price marketization. However, some people think that the above reforms are shocking and costly, which will endanger the safety of power supply and bring a series of unpredictable consequences, and should not be blindly promoted. Others believe that electricity is a basic industry that is related to the economic lifeline and people's livelihood in China. The power system should not copy foreign models, but should strengthen the control of state-owned capital and government supervision, and even question the effectiveness and necessity of separating power plants from power networks since 2002. Due to different understandings, the reform of power system is in a dilemma. I. Main Contradictions and Tasks of Current Electric Power Reform From the analysis of the actual situation, the most prominent contradiction in China's electric power system at present is that the two most important subjects in the electric power market, namely, power generation enterprises (producers) and power users (consumers), are "isolated" in the system and cannot "meet" directly for market transactions. The supply, cost changes and price signals in the power generation market cannot be transmitted to users in time, the demand information of users cannot be directly fed back to power generation enterprises, the market mechanism cannot play a role, the on-grid electricity price and the sales electricity price cannot be adjusted in time, and the relationship between the electricity price level and the price comparison of upstream and downstream products is artificially distorted. The objective impact is that, on the one hand, power generation enterprises, especially thermal power enterprises, suffer serious losses, lack investment enthusiasm, and reduce newly installed capacity, leaving hidden dangers for future power shortage. On the other hand, the low electricity price encourages the excessive development of energy-intensive enterprises (because a large number of products with high energy consumption and low added value are exported, in essence, indirect subsidies attracts foreign users), which strengthens the inertia of extensive development mode and makes it difficult for China's economic and social development to change its mode and adjust its structure. At the same time, residents and other users have no pressure and motivation to save energy because of low electricity prices. Therefore, the urgent task of the current power reform is to create conditions to establish a "buy more and sell more" power pattern, so that power generation enterprises can directly trade with users and form electricity prices through competition. Power grid enterprises only undertake transmission and distribution functions and charge corresponding network fees. Its practical significance lies in that the market mechanism has a "stage" to play its role, and cost changes such as coal price changes can be reflected to the user side in time, which can provide a market platform and policy space for the electricity price to "go higher" when power is tight, avoid the embarrassment that users can't buy electricity at a high price, reduce the electricity price in time to benefit users when power is surplus, and provide institutional guarantee for fundamentally solving the contradiction between coal and electricity; It can effectively regulate the behavior of power production and consumption and avoid the ups and downs of power supply and demand; It can overcome the limitation that the government electricity price is affected by macro-control and the price adjustment is lagging behind or not in place, and also eliminate the public misunderstanding or dissatisfaction caused by information asymmetry. (1) The essence of power grid monopoly is the interweaving of natural monopoly and administrative monopoly power. Natural monopoly means that the power grid transmission and distribution business has the characteristics of scale economy, network economy and scope economy, and has the subadditivity of cost (the cost of exclusive supply is lower than that of many suppliers). From the perspective of economic principles, power grid has typical natural monopoly characteristics. Administrative monopoly shows that power grid enterprises have great decision-making power or influence in power planning, investment, price and market access, and have exclusive franchise rights to buy and sell electricity, in other words, power grid has exclusive market control rights. The above-mentioned administrative monopoly rights were inherited from the Ministry of Electric Power, which did not distinguish between government and enterprises, and the State Power Company, which did not branch the network. The power system reform since 2002 has not weakened the power of the power grid in this regard. On the contrary, with the expansion of power grid scale, the increase of inter-provincial transmission, and the need to improve the security of power system, coupled with the lack of relevant government policies, management and supervision, the administrative monopoly power of power grid has even been strengthened. From another point of view, the monopoly position of power grid enterprises at present is caused to some extent by the government's "inaction" and inadequate supervision functions. With the help of natural monopoly, power grid enterprises expand their market control power, which makes natural monopoly and administrative monopoly intertwined and closely combined, forming the dominant position of power grid enterprises in the power market at present, and also causing criticism and misunderstanding of power grid enterprises from all walks of life. Through rational analysis, it is not difficult to find that the natural monopoly of power grid is its objective attribute, which should not and cannot be broken, because even if transmission and distribution are separated, only a big monopoly has become several small monopolies, and the nature of monopoly has not changed. The quasi-administrative monopoly rights attached to the natural monopoly characteristics of power grid, such as market access rights, standard-setting rights, exclusive power trading rights, electricity tariff settlement rights, etc., are the crux of the problem and the main objects that need to be reformed. The government should seize this main contradiction and take cracking the administrative monopoly power of power grid as the breakthrough of the new round of power system reform. (B) Power dispatching right is the main tool for power grid enterprises to maintain administrative monopoly. At present, China's power dispatching includes seven functions: command, planning, configuration, access, transaction, information and technology. Power grid enterprises exercise corresponding functions and powers through their subordinate power dispatching institutions, which have a decisive influence in the power industry and market. First of all, they organize and coordinate the operation of power system and play a decisive role in power security. The second is to dominate the interests of various market players. At present, there are many kinds of interest games between power plants and power grids, factories and factories, enterprises and users, central and local governments, and state-owned and private foreign-funded enterprises. Power grid enterprises can directly affect the rights and interests of power generation enterprises and users through dispatching, power generation planning and power consumption hour arrangement, as well as switching off power for users and charging capacity increase fees. At the same time, they can avoid government supervision and social supervision by taking advantage of the professional characteristics of dispatching. The third is to affect the implementation of policies and regulations. Relevant national policies and measures, such as releasing more and releasing less, transferring power generation rights and purchasing renewable energy in full, must be implemented by power dispatching, otherwise it will be difficult to implement. Power grid enterprises rely on powerful and irreplaceable dispatching power to restrict power generation enterprises and monopolize power transmission and distribution rights in order to maintain their strong market position of exclusive power trading. (3) The fundamental measure to break the power grid monopoly is to divest the administrative monopoly power with the dispatching function as the core. To sum up, power dispatching has a strong product attribute and is essentially a public administrative function. At present, many administrative monopoly powers owned by power grid enterprises are derived or expanded from dispatching functions. The dispatching organization affiliated to the power grid has consciously or unconsciously become a profit-making tool for power grid enterprises, which makes its role deviate from the essential attribute of its public function. In fact, it is precisely because power grid enterprises have undertaken more public functions with dispatch as the core, and the absence of government and offside of enterprises coexist in the field of power planning and management, which leads to the lack of objective evaluation criteria for some major problems in China's power industry to a certain extent, which invisibly interferes with or even "kidnaps" the authoritative decision of government departments, leading to unresolved disputes about whether UHV AC power grid should be developed, and the accumulated disadvantages such as periodic fluctuations in power development have not been well solved. Dispatching agencies play a similar role to law enforcers in the power market, while power grid enterprises are part of the power market and have their own interests. Giving power grid dispatching power is equivalent to integrating the roles of athletes and referees, which is not conducive to fair competition in the power market and the healthy development of the power industry. Therefore, the power dispatching right should not be controlled by power grid enterprises, but should be dominated by the government. After the dispatching organization is independent from the power grid, the government will get a professional and neutral assistant, which will help improve the level of power planning and management in China and promote the construction and operation of the power market. Three. Comparative analysis of power grid reform paths From the reform measures put forward by various studies at present, there are roughly three schemes to break the power grid monopoly and establish the power market: one is to separate transmission and distribution, the other is to separate distribution, and the third is to dispatch independently. These three methods have their own advantages and disadvantages. Choosing one of the three ways, supplemented by the government's adjustment of relevant policies on electricity trading, can achieve the reform goal of "buying more and selling more" electricity. But there is no doubt that these three methods have their limitations. The separation of transmission and distribution requires a major "operation" on the organizational structure, assets and staffing of the power grid. Because the functional interface between transmission and distribution is not very clear at present, it is difficult to separate it technically. More importantly, after the separation, it will increase the trading links of power and money, externalize internal contradictions and increase management and transaction costs; After separation, there will also be major hidden dangers such as power safety due to unclear responsibilities. In addition, affected by the current stage of China's economic and social development, the regional gap between urban and rural areas and other factors, it is difficult to completely cancel the cross-subsidies for workers, peasants and urban and rural electricity consumption in a long time. Premature allocation will make the competition on the electricity sales side open, making cross-subsidies difficult to operate, highlighting the contradiction between rural power grid construction and residents' unbalanced electricity consumption, and then triggering new contradictions. Power dispatching independence does not involve the physical separation of power grid organization structure, and it is a long-term reform measure that must be promoted. However, at this stage, because the power market construction has just started, after the dispatching organization is completely independent, the power grid enterprises will not bear the responsibility for power system security, and the dispatching organization has not yet established an authoritative operation system, which is prone to problems such as vague responsibility for power grid operation, mutual shirking between the dispatching organization and the power grid enterprises on security issues, and decreased power grid utilization rate, which will eventually lead to increased power security risks and system costs. In addition, after dispatching independence, new management modes such as transmission and distribution price and permitted income are difficult to be put in place in one step, and power grid enterprises lack incentive mechanism, which will aggravate the resistance and difficulty of reform. Generally speaking, the above three methods are all "shock therapy" changes to the current power grid operation mode, which have a great impact on the existing interest pattern, and the reform risks and costs are high, which is not conducive to a smooth transition, and will also make it difficult to form a * * * understanding of reform decisions, thus delaying the reform process. Four. Suggestions for starting a new round of electricity reform To sum up, the "prescription" for electricity reform currently prescribed by relevant parties has certain defects and needs to be found in another way. From the practical feasibility, in order to promote the new round of power reform to start smoothly as soon as possible, after weighing the advantages and disadvantages, it is suggested to adopt the mode of "gradual separation of dispatching", that is, to implement the reform measures of combining "hardware engineering" and "software engineering" for gradual system adjustment. The "hardware project" in "gradual distribution" is to separate the power trading institutions from the power grid. This is an improvement and transitional measure for the independence of power dispatching. From the international experience, due to the huge differences in the historical evolution and system reform path of the power industry, countries choose different trading, dispatching and transmission modes in the power market. There are three basic modes: one is an independent system operator mode, in which dispatching institutions and trading institutions are integrated, independent of transmission companies, represented by the ISO/RTO mode in the United States, and also adopted by Canada, Australia and Argentina. The second mode is transmission system operator mode (TSO), in which the dispatching system and the transmission company are the same organization, and the electricity market transactions are handled by independent trading institutions. This mode is adopted by most European countries. Because the transmission and distribution business in these countries has been separated, transmission companies do not participate in the purchase and sale of electricity. Therefore, the fact that the dispatching organization belongs to the transmission company does not affect the fairness of power transactions. The third is the independent mode of dispatching institutions, trading institutions and transmission companies, such as Brazil and Russia. Although the above three models are different, they have one thing in common, that is, power trading institutions are independent of power grid enterprises. All the countries that took the lead in power reform have chosen this organizational structure, which deserves our serious consideration and reference. From the situation of our country, the power transaction function is one of the main functions of power dispatching. At present, provincial and regional power grid companies have relatively independent power trading institutions. It can be considered to be separated and directly led and authorized by government departments to be responsible for the formulation of electricity market rules, bidding for internet access, contract execution, electricity bill settlement and other duties. Power dispatching functions other than power trading are still exercised by power grid enterprises, which are mainly responsible for the safety inspection of power trading from the technical point of view. In order to adapt to the current situation of regional and provincial power markets in China, independent power trading institutions can be established at regional and provincial levels respectively. Provincial trading institutions are responsible for power transactions within the province, and regional trading institutions are mainly responsible for inter-provincial power transactions. Provincial power grid companies can participate in the regional power market to purchase electricity as "special large users" (representing power users in the whole province), and promote the optimal allocation of inter-provincial resources such as power transmission from west to east and power transmission from north to south. The advantages of adopting this transition mode are as follows: firstly, it builds a unified and convenient direct trading platform for power generation enterprises and users, without separation of transmission and distribution, which is conducive to reducing the market control power of power grid; Second, there is no need to start a new stove, and there will be professional teams and "referees" in power market construction and operation management; Third, power trading institutions are independent of power grids, power plants and users, which can ensure the fairness, justice and transparency of power market competition in terms of organization and system. The "software engineering" in the "gradual distribution" is to make institutional adjustments to the current electricity trading, the qualification for purchasing and selling electricity, and the electricity price, change the corresponding "rules of the game", and create policy conditions for "buying more and selling more" electricity. Mainly implement the following policy adjustments: First, change the mode of power grid supervision and performance appraisal, and gradually change the current mode of power grid profiting from the price difference between purchase and sale to the mode of charging network fees or approving permitted income. Second, the government strictly supervises the service, cost and price of the power grid, and approves the independent transmission and distribution price as the basis and standard for charging the network fee. "Benchmarking" management can be implemented between regional power grids and provincial power grids, and the "leader" transmission and distribution price standard can be formulated according to the advanced level, so as to promote the initiative innovation of power grid enterprises, improve the technical management level and prevent them from obtaining excessive monopoly profits. Third, according to the voltage level and power consumption capacity, large users are forced to start bilateral transactions with power generation enterprises in batches, and the electricity price is formed by negotiation between the two parties or unified bidding organized by the government. Small and medium-sized users temporarily maintain the current mode of unified purchase and marketing of power grids. At the same time, all wholesale power enterprises and other power supply enterprises independent of the provincial power grid (mainly supplying power to rural users at or below the county level, similar to foreign power distribution companies) are given the right to purchase electricity directly, and the opening of the power market and the reform of rural power supply are considered as a whole, so as to avoid creating obstacles for the establishment of a unified power market in the future because of the "single-soldier assault" to solve rural power system problems in isolation at present. Because the electricity consumption of large users such as industry accounts for about 70% of the total electricity consumption (of which the wholesale electricity consumption will reach more than 80%), after the implementation of bilateral transactions, the electricity price of this part of electricity will be formed by the market, thus opening up the channel for timely transmission of power generation and terminal electricity prices, which will solve the contradiction between coal and electricity prices that has plagued for many years. Residents, agriculture and other small and medium-sized users can reasonably reflect the changes in market supply and demand by implementing the ladder price system on the premise of keeping the electricity price relatively stable. After the implementation of the above reforms, the exclusive privilege of power grid enterprises to purchase and sell electricity will naturally be eliminated. This makes the power grid enterprises lose some of their acquired rights, but in turn, it will form a new "institutional incentive", which will make them more focused on the management of the main business of transmission and distribution, without worrying about the interests of power generation enterprises and users, which is conducive to improving the operation and safety level of the power grid from the mechanism. The combination of "hardware engineering" and "software engineering" does not need to split the physical structure of the power grid, and also avoids the potential safety hazards caused by the independence of power dispatching. Generally speaking, the reform has small vibration, low cost and controllable risks, which is a shortcut choice to promote the restart of power system reform under the current situation. On this basis, in the middle and late stage of the reform, according to the needs of power development and the degree of market development, independent dispatching, separation of transmission and distribution, separation of distribution and other reforms can be implemented step by step, so as to further tap the potential of subdivided management and cost reduction of power grid enterprises, gradually liberalize bilateral transactions between small and medium-sized users and power generation enterprises, and realize full competition in power generation and sales. It is worth noting that the separation of transmission and distribution is not a necessary condition to break the monopoly of power grid at present, but its implementation is conducive to cultivating diversified competitors and strengthening supervision to reduce the operating cost of power grid. Even if transmission and distribution are separated in the future, it is necessary to combine the introduction of diversified investors (such as encouraging local governments, private capital and foreign capital to participate in the distribution of power companies) with the simultaneous implementation of competition in the electricity sales market, so as to have the value of reform. If it is impossible to restructure property rights and compete in the market after separation, it is unnecessary. On the contrary, it will bring hidden dangers to power grid security, increase transaction costs, and leave a sequela similar to the separation of power plants and networks. Therefore, it is not appropriate to implement it blindly and hastily at present. In contrast, the reform mode of "gradual division" shows its practical and operational advantages. V. Supporting the reform of government management methods From the above analysis, it can be seen that the main contradiction and crux of the current power system is not the natural monopoly of the power grid itself, but the administrative monopoly brought about by the design of relevant government systems. Therefore, on the basis of implementing the independence of power trading institutions and building a competitive power market, it is more important to reform the concept, content and mode of government's own power management. At present, we should focus on the following aspects: First, nationalize the power grid planning, standards, power grid access and other administrative powers that should be exercised by the government, so as to avoid policy vacancy and management "vacuum", and make the power grid return to its original role as an enterprise, no longer undertake administrative functions, and truly perform its duties in accordance with the modern enterprise system. The second is to stipulate and supervise the fair and non-discriminatory opening of the power grid to all users and power generation enterprises (including distributed energy and self-owned power plants), and formulate relevant regulations on power quality, grid-connected standards and dispatching management methods of new energy, renewable energy and distributed energy, so as to provide a good policy environment for their online consumption and sustainable development. Third, create conditions to gradually liberalize electricity prices that can be formed by market competition, such as on-grid electricity prices and sales electricity prices of industrial and commercial users, so that the market mechanism can fully play its role. In the transitional period, a scientific, reasonable and flexible price mechanism should also be established for the electricity price set by the government. Fourth, make overall plans for power construction, announce the access standards for land, environmental protection and energy efficiency in advance, gradually and orderly liberalize the market access for new power generation projects, simplify the approval procedures for power projects, let project owners make their own decisions and take risks at their own risk, and avoid vicious competition such as "staking the land". The fifth is to distinguish between the production and operation of electric power enterprises and public service responsibilities, and implement different assessment methods. Establish a new government-led universal service mechanism for electricity, mainly to pay for policy and public welfare expenditures such as residents, agricultural production and preferential electricity use in remote areas, gradually reduce cross-subsidies, and change implicit subsidies into explicit subsidies. (The author works for the National Energy Administration, and this article only represents the author's personal views. )