Yunnan, Shaanxi, Ningxia and other places have issued the draft of medium and long-term power trading rules for comments. Recently, in order to further standardize medium - and long-term power trading, Yunnan energy regulatory office and northwest Energy Regulatory Bureau issued a notice on publicly soliciting opinions and suggestions on medium - and long-term power trading rules in Yunnan, Shaanxi and Ningxia.
Expand the scope of market transactions and encourage industrial and commercial users to trade in the market. The draft for comments issued by various localities all put forward provisions to encourage industrial and commercial users to conduct market transactions. Yunnan's "draft for comments" proposed that "all industrial and commercial users except residents and agricultural power consumption should be liberalized to participate in the market"; Shaanxi's exposure draft puts forward in the market access conditions for power users that "in principle, all industrial and commercial users enter the power market"; Ningxia proposed in the draft for comments that "in principle, industrial and commercial users of 10kV and above should directly participate in market transactions".
Emphasize the market pricing mechanism and expand the floating range of electricity price. In the "price mechanism" chapter of the draft for comments, all localities emphasize that the transaction price of medium and long-term power transactions should be formed by market subjects through bilateral negotiation, centralized trading and other market-oriented methods, and no third party shall intervene. The exposure draft of Yunnan and Ningxia both put forward that "in principle, there is no price limit for bilateral negotiation transactions. In centralized bidding transactions, in order to avoid market manipulation and vicious competition, upper and lower limits can be set for quotation or clearing prices." Shaanxi's draft for comments puts forward that "the on grid price of coal-fired power generation participating in the medium and long-term market-oriented trading of electric power shall be formed by the market subject in the range of" benchmark price + fluctuation ", and the fluctuation range shall not exceed 20% of the benchmark price. Among them, the fluctuation range of market transaction price of coal-fired power generation enterprises and high energy consuming enterprises shall not be limited by 20%
Encourage time-sharing electricity trading. Yunnan's "exposure draft" proposes that "users who implement peak and valley electricity prices shall continue to implement peak and valley electricity prices after participating in market-oriented transactions. Market entities shall sign medium and long-term contracts for time-sharing electricity to reflect the prices of each time period. In principle, the peak and valley ratio of time-sharing electricity prices shall not be lower than the relevant provisions of the price competent department of the provincial government". Shaanxi proposed in the exposure draft that "the bilateral negotiation transaction shall agree on the power transaction (dispatching) curve, and the time-sharing (such as peak valley level) power and electricity transaction can be carried out when conditions are met". Ningxia's exposure draft proposes to "explore the transformation of medium and long-term transactions from electricity trading to time division trading, and establish a flexible contract adjustment mechanism based on the formation of contracts for time division electric energy (electricity) trading, combined with power generation and consumption forecasts and changes in the situation".
Promote green power trading. Yunnan proposed in the draft for comments, "We will continue to enrich trading varieties and promote the continuous improvement of the market mechanism. We will carry out green power trading and guide green power consumption in a market-oriented manner. We will explore the establishment of different types of power sources such as flexible regulation, energy storage and emergency to participate in the power market mechanism and guide the investment and construction of various types of power sources. We will establish a demand side response mechanism to fully tap the response potential of various market players and work together Ensure the safety of power supply ".
The introduction of medium and long-term rules for local power will continuously improve China's power market trading mechanism of "rising and falling", further promote the market-oriented reform of China's power, and be conducive to the cost transmission and value discovery of power generation enterprises. We maintain the "optimistic" investment rating of the industry and recommend Huaneng Lancang River Hydropower Inc(600025) , Sichuan Chuantou Energy Co.Ltd(600674) , China Yangtze Power Co.Ltd(600900) , Huaneng Power International Inc(600011) electric power, Datang new energy and other companies.
Risk tip: the implementation of carbon neutralization policy is not as expected; Power market reform is not as expected;
(Capital Securities)
