In recent years, the mechanism reform of nuclear power on grid price at the national level has been continuously promoted. This year, “promoting the reform of the formation mechanism of on grid electricity prices for gas-fired power generation and nuclear power” was written into the draft report of the national economic and social development plan of the national development and Reform Commission.
It is understood that with the gradual advancement of power marketization, the proportion of market-oriented nuclear power transactions has gradually expanded in recent years. As of last year, nearly 40% of the scale of nuclear power has formed prices through market-oriented transactions.
“The national development and Reform Commission has been investigating the price of nuclear power in the past two years,” a relevant person of CGN said in an interview with the financial associated press Promoting the reform of the formation mechanism of on grid electricity price for gas-fired power generation and nuclear power is launched under the background of building a new power system with new energy as the main body and continuously deepening the reform of electricity price. However, as the detailed rules have not been issued yet, the impact on the company’s performance cannot be judged. However, it is expected to improve the nuclear power price mechanism according to the attributes of public utilities.
For the potential industry impact brought by the “price reform” of nuclear power, Zhou Zhe, CO chief analyst of environmental protection and public utilities of Anxin securities, believes that since this year, with the promotion of market-oriented reform, the price of nuclear power has increased. Therefore, in the short term, it may contribute to the profit of the overall nuclear power industry; In the long run, the market-oriented reform of the formation mechanism of nuclear power on grid price is expected to be promoted continuously.
nuclear power price market-oriented reform at the right time
In fact, nuclear power “price reform” has a long history. Before 2013, the on grid price of nuclear power plants mostly adopted the pricing method of “one plant, one price”, but under this pricing mode, the phenomenon of overdue and over budget of nuclear power plant construction is common. In June 2013, the national development and Reform Commission set the benchmark electricity price approved by the national nuclear power as 0.43 yuan per kilowatt hour, but it also stipulated that the tax price of nuclear power should be benchmarked with the basic thermal power price, and the pricing strategy of “taking the lower of the two prices” should be implemented.
Following the new round of power market-oriented reform in 2015, the nuclear power price has gradually introduced the bilateral negotiated pricing and market bidding mechanism, which puts forward higher requirements for the economy of nuclear power. Since 2020, the coal electricity price linkage mechanism has been abolished, and the pricing mechanism has been changed from the benchmark on grid price to the market-oriented mechanism of “benchmark price + floating up and down”, which has affected the pricing mechanism of nuclear power on grid price to a certain extent.
Relevant personnel of CGN said that under the background that the third generation nuclear power has become the main force of China National Nuclear Power Co.Ltd(601985) construction, the objective situation also requires to adjust the electricity price to give reasonable benefits to nuclear power operation.
Jiangsu Shentong Valve Co.Ltd(002438) executives told the financial associated press that the on grid price of nuclear power had been basically based on the “four to six” pricing mechanism, about 60% of which was based on the price approved by the national development and Reform Commission, and the rest was market-oriented. In the middle of last year, there was a watershed in the market electricity price. The state of discount in the early stage was changed. In the second half of the year, it was 10-20% higher than the approved electricity price. The rise of this part of electricity price has been good for the nuclear power industry.
The reporter learned from the comprehensive interview that the nuclear power price reform has been under discussion. At present, there is no very clear statement in the industry on how to adjust the pricing method. The relatively consistent expectation is that the benchmark price of 0.43 yuan and the coal power price will not be priced in the “lower” way, which is likely to level the prices of several types of power sources.
“Market based pricing is the direction of the formation mechanism of nuclear power on grid price in the future.” Zhang Wenda, Macro Analyst of Societe Generale research, told the associated press that, on the one hand, it is possible to follow the reform idea of thermal power in the future, appropriately liberalize the floating proportion of on grid electricity price of nuclear power, and realize price dynamic adjustment according to market supply and demand. On the other hand, the market-oriented trading power of nuclear power may continue to increase in the future, and the acceptable price level of nuclear power will be determined with the help of the power market.
In recent years, China National Nuclear Power Co.Ltd(601985) scale has continued to grow. According to the data of China Nuclear Energy Industry Association, from January to December 2021, the cumulative power generation of operating nuclear power units in China was 407141 billion kwh, an increase of 11.17% over the same period in 2020, accounting for 5.02% of the cumulative power generation in China. By the end of 2021, the number of nuclear power units in operation was 53, 4 more than that at the end of 2020. From the perspective of environmental protection, compared with coal-fired power generation, nuclear power generation in 2021 is equivalent to reducing the combustion of 1155805 million tons of standard coal, reducing the emission of 3028209 million tons of carbon dioxide, 982400 tons of sulfur dioxide and 855300 tons of nitrogen oxides respectively.
“Compared with the nuclear power price that relies more on policy support in the past, it may face some problems in the process of large-scale development, so it is necessary to gradually consider the market competitiveness of nuclear power price”. Zhou Dadi, vice president of China Energy Research Association, told the financial associated press that the reform of nuclear power on grid price is a process from the past approved fixed price to gradually participating in market-oriented competition. However, considering that the current electricity price competition mechanism still needs to be improved, and different time-sharing on grid price and different functional electricity price are not complete, if the nuclear power on grid price is allowed to adopt the competition mechanism completely, At present, there are still some difficulties and need to be further studied.
industry: “price reform” ushered in good or forced enterprises to “reduce costs and increase efficiency”
The above Jiangsu Shentong Valve Co.Ltd(002438) executives said, “the cost pricing advantage of nuclear power is very obvious, the long-term operation cost is very low, the main investment is the construction cost in the early stage, and the increase of electricity price will be transformed into profits. After the improvement of economic benefits, it is a positive signal for promoting the development of nuclear power industry and gives downstream equipment manufacturers flexible room for price adjustment”.
\u3000\u3000 “Nuclear power projects, whether new construction or stock renewal, have strong stickiness to the adopted equipment and will not be replaced easily. At present, the company participates in the bidding of nuclear power equipment and generally uses the method of cost plus to bid. The enterprise will respond in advance to the price rise of raw materials, and lock the price of main raw materials after winning the bid to ensure that there will be no major fluctuations within the implementation cycle 。” These people said.
Zhang Wenda believes that the reform of the formation mechanism of nuclear power on grid price means that the competition degree of nuclear power industry will be further improved to a certain extent, and the operating pressure of nuclear power plants may be increased. This will further require nuclear power enterprises to improve their technical level and reduce construction costs and fuel costs to ensure their own price advantage.
An insider admitted that the market-oriented reform of nuclear power feed in price is actually “cost driven”. Therefore, nuclear power enterprises should establish the management concept of “construction is operation”, and take relevant measures to reduce cost, reduce cost and increase profit space for design, construction and financing modes on the premise of established income.
Looking to the future, some insiders suggested that on the one hand, nuclear power enterprises can establish their own power sales companies to take the lead in market-oriented competition with market-oriented thinking; On the other hand, the business scope can also be extended to regional power sales, auxiliary service measurement and other related fields, such as providing users with value-added services such as contract energy management, comprehensive energy conservation and energy consumption consulting, so as to effectively provide users with personalized comprehensive energy-saving schemes.
