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From 2015 to the present, power reform has been going on for three years. Recently, the relevant departments issued the "Notice on Actively Promoting Power Market Trading and Further Improving the Trading Mechanism" (referred to as the "Notice"). The "Notice" promotes various types of power generation enterprises to enter the market, such as wind power and solar energy instead of coal-fired power, and expands power trading. In 2018, four power users, including coal, steel, nonferrous metals and building materials, will be released to use electricity. And bear the clean energy quota.

The effective promotion of power market reform is the key to the success of the new round of power reform. Obviously, in addition to clarifying the direction and principles of reform, the plan for power market reform should also consider specific implementation methods. For example, how to establish an effective market trading mechanism, how to design a specific path, how to cultivate market entities, how to design a price mechanism, and so on. The "Notice" has clarified the issue of how to implement the reform of the power market, and provided further concrete implementation opinions.

The author believes that the "Notice" reflects the determination of the government's reform. In the market environment, the behavior of the participating entities is aimed at greater self-interest. After the establishment of a competitive electricity market, it is very likely that users who can reduce electricity prices by participating in market-based transactions will actively turn into market-oriented transactions, and the average electricity price of these users is also low. Under market-based trading, users whose electricity prices may rise will not actively participate in market transactions. Since the cost of power supply is unlikely to change too much in a short period of time, the total amount of cake in the market is relatively limited. Therefore, when the price of some users decreases, it may mean that the price of electricity for another part of the user needs to rise. Existing cross-subsidy scales and mechanisms may not be able to accommodate future subsidy needs. If the vacancy is filled by increasing the scale of cross-subsidy, it may lead to an increase in the burden of cross-subsidization for market-based trading users, which will affect the enthusiasm of users to participate in market transactions.

Of course, if the qualified users must participate in the market-oriented transaction, the problem will be solved. But the key to the problem is how to design an effective mechanism to expand the scale of market-oriented transactions in the process of market-oriented reforms, in the case of users voluntarily choosing. The author believes that one way is to increase the price of electricity that is not involved in market transactions, reduce the pressure of cross-subsidy, and give enterprises stronger incentives to participate in market transactions. Another way is to reduce the gap in cross-subsidization through direct financial subsidies during the transition period.

The recent high coal prices have also brought pressure on the reform of the power market. China's current power system is basically a coal-fired power system. In general, it is easier to push forward reforms when coal costs are lower. Because the price of electricity after the reform will fall, the enthusiasm of users to participate in market-oriented transactions is also higher, and the enthusiasm of local governments to participate in and promote reform is also high. However, coal prices have reached a high level in recent years, and the production costs of thermal power companies have risen rapidly and are close to the break-even point. On the other hand, in the past two years, the demand for electricity has also increased rapidly. If the demand for electricity continues to rise in the future and gradually approaches equilibrium, market-based transactions under such equilibrium conditions are likely to mean an increase in electricity prices and uncertainty in future electricity prices. It will also be relatively high, which will affect the enthusiasm of market participants. Therefore, the success of the power market reform may also require the promotion of other external conditions. In addition to the government's use of this time window to accelerate market-oriented construction, it is also necessary to maintain relatively stable coal prices, such as rationally defining the coal industry's capacity-removal policy and accelerating the release of advanced production capacity.

The "Notice" clarifies that the electricity price of electricity users is composed of three parts, including the price determined by power generation companies, power sales companies, and the clear transmission and distribution prices of government departments and government funds. However, regarding the determination of the transmission and distribution price, it may be due to other relevant regulations issued, but there is no clear explanation. In fact, at the peak of the power load, the capacity of the transmission and distribution network may be an important factor affecting the marginal power supply cost. If only the current fixed transmission and distribution price is adopted, it will likely lead to a shortage of power consumption peaks, especially in the summer. Therefore, when determining the transmission and distribution price, it may also be necessary to consider the difference between peak and valley demand and make differentiated pricing. Also consider introducing a spike pricing mechanism. After the market mechanism has developed to a certain extent, the formulation of transmission and distribution prices can also be introduced into the competition.

The Notice has repeatedly mentioned that users should bear the responsibility for the consumption of renewable energy quotas. However, the determination of specific renewable energy quotas is more difficult. Relative to the trading system, the quota system is effective, but it is a high-cost way of consumption. Because the quota system is in the process of implementation, in order to meet the task of quotas, consumers must spend time and energy to search and purchase renewable energy. This is a hidden cost and will add an extra burden to the power management of enterprises. . If the current direct subsidies for renewable energy (actually cross-subsidies), the company has already assumed the obligation to dispose of renewable energy. Renewable energy power generation companies can participate in the auction at a lower feed-in tariff after receiving subsidies.

In addition, how to determine the number of hours of use of renewable energy such as wind power, solar energy, etc., with reference to the experience of European power grids, renewable energy companies are willing to accept negative electricity prices, because the subsidies are considered, even if the electricity price is negative, Renewable energy companies are also able to generate revenue. There is a need to encourage cost reduction and increase the price competitiveness of renewable energy. The problem of consumption should be more tried to solve through market-based means.

In the past three years, the policy of calling change has been frequent. Recently, relevant departments have issued regulations on promoting the standardization of power trading institutions. The implementation plan is required to be reported at the end of September and completed at the end of the year to accelerate the standardization of power trading institutions. It is required that the ratio of capital stocks of non-grid enterprises should be no less than 20%, and it is encouraged to improve the shareholding structure according to the non-grid enterprise capital accounted for about 50% of the shares. This measure to break the monopoly of power grid enterprises will undoubtedly have a positive effect in the process of power reform.

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