From the perspective of the two sessions, China's

Looking at the trend of China's energy policy from the "two sessions": power reform, new energy and coal-fired power capacity reduction

Abstract: the government work report is written in pearls, involving many fields of the national economy, and the tone of the report represents the focus and direction of the government's work. In terms of energy sector, the government work report mentioned energy five times and electricity three times. The key work involves three aspects: electricity reform, new energy integration and consumption, and coal and electricity capacity removal

the government work report is written in pearls and involves many fields of the national economy. The tone of the report represents the focus and direction of the government's work. In terms of energy sector, the government work report mentioned energy five times and electricity three times. The key work involves three aspects: electricity reform, new energy integration and consumption, and coal and electricity capacity removal

for power reform, when the bubble expands faster, the government work report and the central economic work conference both regard the power industry as a key area to promote the mixed reform, requiring "substantive steps" and special emphasis on "doing a good job" in the power system reform. On the basis of last year, we believe that this year will be the second outbreak of power reform. Fuling power, Wenshan power and other power system power sales platforms will be the biggest beneficiaries; Hezong technology, Beijing Kerui, etc. benefited from the small market value and high elastic target of the liberalization of the incremental distribution market

for new energy and consumption, the government work report for the first time included the problem of "abandoning wind, light and water" in the government work report. After high growth, the growth rate of wind power and photovoltaic began to fall, and the problem of "three abandonments" has become increasingly prominent. This problem has also received the attention of the State Council. After a series of institutional and technical measures, it is expected to improve within the year. Recommend Goldwind technology, Tianshun wind energy, Taisheng wind energy and Longji, which are the leading targets in the industry

the State Council has a firm attitude towards the removal of coal-fired power capacity, and proposed to "eliminate, suspend and delay the construction of coal-fired power capacity of more than 50million kW this year, in order to prevent and resolve the risk of excess coal-fired power capacity". Through tough administrative measures, supplemented by the market method of power reform, the capacity reduction effect on the power generation side can appear in the short term, and the phased deterioration of coal power is also expected to reach the bottom. Recommended performance is expected to turn losses: Datang Power Generation, Gansu Power Investment

first, we should pay close attention to the reform of electricity, and we should take substantive steps in the mixed reform of the power industry.

the government work report specifically puts forward that "we should deepen the reform of mixed ownership and take substantive steps in the fields of electricity, oil, natural gas, railway, civil aviation, telecommunications, military industry and so on. We should pay close attention to the reform of the system of electricity, oil and gas, and open up competitive businesses."

power reform is the core of China's economic system reform, and it is also the work strongly promoted by the central government. The new round of power reform has been carried out for two years since 2015. In the two years, the reform has been carried out from the introduction of policies to local pilot projects, and then to the implementation of supporting documents. The reform process has exceeded the expectations of the power industry and the capital market

chart 1 power reform produces a new trading order in the power market

power reform is overturning the traditional power market order. At present, 23 provinces across the country have launched the pilot of comprehensive reform of the power system, 33 power trading institutions have been registered, 31 provincial-level power transmission and distribution price reforms have been fully covered, 6400 power distribution companies have been established, power market transactions have exceeded 1trillion kwh, and 105 incremental distribution reforms have been launched

the electric power reform is also the most fundamental in the current economic system reform. 2. The machine adopts the driving system of computer measurement and control, the electric load measurement system and the foundation of the American Digital long displacement detection system, which is the most visible and successful field. Driven by multiple factors such as power supply side reform, strong promotion by the central and local governments, and the release of power reform dividends, we believe that power reform will enter the second round of outbreak in 2017

second, the problem of new energy and consumption remains to be solved. The government work report, which recommends the leading growth target,

puts forward: "we should pay close attention to solving the mechanism and technical problems, give priority to ensuring renewable energy power generation, and effectively alleviate the situation of water, wind and light abandonment." This is the first time that "abandon wind, light and water" has been written into the government work report. On the one hand, it does not avoid the problems faced by the development of the clean energy industry, on the other hand, it highlights the determination of the country to solve the problems

since the "12th Five Year Plan", China's renewable energy has entered the channel of rapid development. At present, the installed capacity of wind power and photovoltaic power generation ranks first in the world, with the installed capacity of 150gw and 77gw. From the perspective of the ratio of new energy installed capacity to maximum load (i.e. new energy penetration), China's is 22%, higher than the United States (10%), lower than Denmark (93%), Spain (78%) and Portugal (63%), at a medium level. Under the relatively low permeability index, problems such as wind (light) curtailment, subsidy arrears, insufficient growth momentum and so on have attracted the attention of all parties

chart 2 wind power installed growth rate fell from a high level

Chart 3 National Wind curtailment (rate) rebounded continuously

Chart 4 photovoltaic installed growth rate fell from a high level

Chart 5 key provinces Gansu solar curtailment rate of more than 30%

wind curtailment (light, water) power curtailment from the formation mechanism, is the imbalance between the output of new energy and the power load, in order to maintain the stability of the power system must not act. From this perspective, there are only two ways to solve and absorb: first, increase the proportion of local consumption and increase the scale of power transmission; The second is to increase the regulation capacity of the power system, including the construction of peak shaving power supply, the flexibility transformation of thermal power units, and demand side response

for systems without internal network constraints, the consumption of new energy only needs to meet the dynamic balance of power generation and consumption and the lower limit constraints of system regulation capacity. The system regulation space between the "load + tie line outgoing power" curve and the lower limit of system regulation capacity is the theoretical maximum consumption space of new energy

Figure 6 schematic diagram of new energy consumption space

however, increasing new energy consumption is not a technical problem, but a problem of system and interests. The government work report also puts the problem of solving the mechanism in the first place, including straightening out the benefit compensation mechanism between clean energy and fossil energy, the benefit between clean energy and electricity, the relationship between power construction and power planning, auxiliary services and peak shaving compensation mechanism, cross regional power transmission benefit coordination, demand side response, energy storage participation in peak shaving and frequency modulation support policy, renewable energy quota system Electricity market trading mechanism and a series of other issues

third, coal-fired power overcapacity is increased, and the rebound of power generation performance is expected.

the government work report puts forward that this year, "coal-fired power production capacity of more than 50million kW should be eliminated, suspended and delayed, so as to prevent and resolve the risk of excess coal-fired power production capacity, improve the efficiency of the coal-fired power industry, and make room for the development of clean energy."

according to the goals set out in the 13th five year plan for power development, the installed capacity of coal-fired power in China will be controlled within 1.1 billion kw by 2020. Based on the requirements of coal power overcapacity and power planning and management, the national energy administration has successively issued documents such as the notice on further regulating the construction of coal power regulations and the notice on promoting the orderly development of coal power due to the value of equipment determined by quality in China, so as to strictly control the scale of new coal power installations

since the end of last year, the national energy administration has communicated with more than 20 provinces, postponed some coal-fired power projects included in the planning and approval (under construction) to the 14th five year plan and beyond, and clarified the control objectives of the scale of coal-fired power production during the 13th five year plan

according to our statistics, the national energy administration has determined that the new coal power capacity postponed or cancelled is more than 160million kW, and the upper limit of the new coal power installed capacity in each province in the four years after the 13th five year plan is about 120million kW

Part 7 of the chart is postponed to the "14th five year plan" and later coal-fired power transmission projects

for the existing coal-fired power units, the policy guidance is: continue to strengthen the elimination of backward coal-fired power units, and focus on the elimination and transformation. At this time, the units that still do not meet the requirements of energy efficiency and environmental protection after the results of each experiment should be recorded, and the elimination scale is expected to be more than 4million kW in 2017. According to our research, for coal-fired power units with less than 300000 kW, all non cogeneration projects should be shut down; Cogeneration projects with a heat to power ratio of less than 80% during the heating period are also within the scope of shutdown, slow construction and slow nuclear power generation

after the continuous deterioration of coal power performance, the performance of the power industry is expected to improve in the second half of the year based on factors such as power generation side capacity reduction, coal price stabilization, and power generation redistribution

chart 8 the utilization hours of thermal power equipment for power generation are at the bottom of the past 15 years

looking back over the past two years, affected by factors such as the sharp rise in coal prices, the slowdown in the growth rate of electricity consumption, excess capacity of coal and electricity, the promotion of electricity reform, the reduction of electricity prices, environmental pressure and so on, the performance of coal and electricity enterprises has been deteriorating since the second half of 2016, thermal power has continued to decline from the "best in history" performance peak, and the number of power generation hours in 2017 hit a new low since 1969, Some enterprises are in a loss situation. The power generation sector has entered the bottom of the cycle

with the strong intervention of administrative means, the situation of large-scale expansion of coal and electricity will be eased; The promotion of power market reform forced the shutdown of inefficient supply. In the process of promoting the power reform, the power generation and utilization plan will be gradually cancelled and the power transaction scale will be increased. Small thermal power and small hydropower, accounting for 20%, will gradually withdraw from the market, and the generation hours will be transferred to large-capacity and high-efficiency units

IV. appendix: Figure 9 different arrangements for the development of clean energy and power reform in the government work report in the past five years