BEIJING, Apr. 12 (Xinhua) - After nine months of modification, the National Development and Reform Commission and the National Energy Administration eventually issued the circular on orderly removing control over power generation and consumption planning on April 10.
As a core document for the power system reform, the circular clearly puts up to remove control over planning for multi types of power generation and consumption, including reducing power generation plan of operational coal-fired power plants year by year, adopting market-oriented trade of power output of all newly approved coal-fired power generation units, orderly removing control over planning for cross-provincial and -regional power transmission and acceptance, guiding small- and medium power consumers to participate in market trade, calling off catalog prices for power consumers in the market, and entirely open on-grid price and sales price except for the sales price for public power when the power market grow mature.
Insiders believe that the circular has leaped forward in promoting reforms in the power system and the power supply side and restoring the nature of electricity as a commodity. Power market reform is likely to extend to various power generation types nationwide, benefiting the entire power market. Thermal power generation is to receive institutional supports. Meanwhile, power sales market is expected to expand quickly with promoted position of power sales companies.
Upon the issuance of the circular, removing power generation and consumption planning has moved to the operational level, and a wholesales market for power trade is to take shape. Power producers and consumers would realize direct matchmaking trading, said Zeng Ming, a professor with North China Electric Power University.
Zeng reckons that after the reform, power sales companies would be able to contact with more power producers and pick the ideal one to deal with. Although this may trigger power price fall, it makes small profits but quick turnover possible.
Shenwan Hongyuan Securities takes that the introduction of small- and medium-power consumers into the market would enormously expand the scale of consumers participating in power price bidding, redress the imbalance between a fully market-oriented power generation side and partially opened power demand side, raise the margin price for power trading, and benefit power producers. Enditem (Edited by Li Xiaohui, lixh@xinhua.org)
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