中国电力市场改革棋局新动向（英）

November2023 NewmovesinChina’spower marketreformchessgame EnergyInsight:139 AndersHove,SeniorResearchFellow,OIES ThispaperprovidesanupdateonChina’sprogresstowardsachievingcarbonpeakingandneutralitygivendevelopmentsinthepastyear,particularlyintermsofmajorgrowthinbothcoalandrenewablecapacity,aswellasthenewlypublishedpowermarketreformdocuments. High-levelemphasisonenergysecurityoverclimateandairqualityprioritiesiscontributingtoaburstofcoalpowerconstructionacrossChina.Coaladditionsaretakingplaceinregionswithamplecoalcapacitytomeetpeakandbalancevariablerenewables.Thisappearstobedrivenprimarilybythedesireofprovincialofficialstolockinmoreinfrastructureinvestmentsnow,whilecoalplantsareencouraged. China’spresentcoalboomislikelytoleadtoovercapacityinmanyprovinces.Currently,Chinareliesonadministrativepoliciestoencouragegridcompaniesandprovincialplannerstoabsorbvariablerenewableenergy. Asthecoalovercapacityproblemworsens,financiallossesatcoalplantsaredrivingthepushtoadoptaspecificcapacitypaymentforcoalplants.ThecapacitypaymentpolicyannouncedinNovember2023couldprovidefurtherincentivetobuildmorecoalcapacity,whichmighteventuallyleadofficialstoweakenrequirementsforfullyutilizingwindandsolarenergy,andeventodiscourageconstructionofnewwindandsolarcapacity. China’sotherrecentmarketreformdocuments,suchastherecentlyreleasedprinciplesforanationalpowermarketdesign,leavemostaspectsofmarketdesignuptoprovincialofficials,andmayprovideinsufficientimpetustoincreasevolumesofinter-provincialtradingorspotmarkettradingthatcouldreducethemotivationtobuildmorecoalplants. Thecoaloverbuild,whileaimedatimprovingreliability,willalsoleadtohighercosts,especiallycomparedtoalternativessuchasincreasingpowertradingamongprovincesandregions,orincreasingdemandresponsebyallowinggreaterpricevolatilityinshort-termpowermarkets.Highercostsultimatelyleadtohigherelectricityprices,whetherthesearebornebythestate(suchasthroughfinanciallossesatstate-ownedcoalplants)orbyelectricitycustomersthroughhigherprices. Similarly,coalovercapacitycouldrestricttheinterestininvestmentinnewgascapacityand,intheabsenceofhigh-volumespotelectricitymarkets,couldreducethedispatchofexistinggas-firedpowerassets. Chinaremainscommittedtocarbonneutralityanditsrenewablecapacityisalsoexpandingatanacceleratingrate,includingdistributedsolarphotovoltaics(PV)andenergystoragetobalancetheintermittencyofrenewables.WindandsolarnotonlywillexceedChina’s2030targetsyearsaheadofschedule,butalsocouldsurpasswhatvariousforecastssuggested Chinawouldneedtoachievecarbonneutralitybymid-century.1However,thisassumesthatrenewablescontinuetobeaddedandfullyutilized. Whilerenewablesaregrowingatanunprecedentedpaceandcurtailmentispresentlyundercontrol,tyingupfinancialresourcesinexcesscoalcapacitycouldpressureplannersandothermarketplayerstoslowtheenergytransition.Thiscouldincludeallowinggreaterwindandsolarcurtailment(whichallowscoalplantstooperateathigherlevelstorecovercosts),discouragingnewrenewableadditions,orimposingnewcostsonrenewablegenerators(suchascapacitypayments,storagerequirements,orrequirementstosubsidizelocalindustry)thatwouldslowinvestmentinthefield. Lastly,anenergytransitionwithahigherpeakofcoalelectricityproductionimpliesincreasedtensionatglobalclimatetalks,giventhevisibilityofChina’scoalbuild-outandthegovernment’ssensitivitytocriticismonthispoint.NowthatChinahaslargelyendedfinancingforcoalprojectsabroad,ironicallythistendstofocusevenmoreglobalattentiononChinaasthelastcountrystillbuildingcoalpoweratscale.2 Introduction:Arepowerreformsslow,ormerelylessambitiousthanmanyassumed? Electricpowermarketreformisalongprocess.InApril,China’sNationalEnergyAdministration(NEA)comparedthecountry’schangingpowersystemandrelatedreformstoa‘gameofchesscoveringthewholecountry’.Powermarketreformshavenowbeenunderwayforeightyears—thatis,since2015,whenChina’sStateCouncilissuedDocument#9ondeepeningreformofthepowersector.3Aflurryofdocumentsreleasedoverthepastseveralmonthsleavemanyimportantissuesunresolved,andcontradictionsappeartobeincreasingbetweenvarioushigh-levelpolicypronouncementsonclimate,energysecurity,andtheroleofmarkets.TheseincludeanewsetofnationalpowermarketdesignprinciplesissuedinSeptember,anewpolicyexpandingthecoverageofgreencertificates,andanewcapacitymechanismthatwouldoffercoalplantspaymentstohelpthesectoravoidfinanciallosses. Step-by-stepprogressonreformpolicies,combinedwiththeacceleratingbuild-outofrenewableenergy,cancontributetomeetingChina’sclimateobjectivesofcarbonpeakingandcarbonneutrality.However,overcapacityincoalpowerandnewincentivesforcoalgeneratorscouldultimatelyslowthebuild-outanduptakeofcleanenergy,andcouldincentivizelocalofficialstode-prioritizeclimatepolicy,underminingChina’sannouncedclimateobjectives. Inearly2022,theNationalDevelopmentandReformCommission(NDRC)setoutatimelineforpowermarkets,callingforanationaldesignby2025,andforthisdesigntobebasicallyimplementedby2030.4Thistimelinesuggeststhatpowermarketreformsareonlyjustpastthehalfwaymark.Thedocumentlistedvarioustypesofpowermarketsthatthenati