How China's Electric Power System Reform Breaks the Bottleneck

At present, China’s electricity system reforms have been almost stagnant. This not only raises questions and confusion, but also leads to the “ceiling” of “institutional” power state-owned enterprises undergoing reforms. The next step is how to truly advance the reform of power state-owned enterprises, and how to break the external bottlenecks of development? It has become a common problem for power state-owned enterprises.

Body made the biggest obstacle to reform

“The reform of state-owned power companies is very complicated. From the perspective of the entire power industry, this reform is not driven by general measures.” A few days ago, people in the industry interviewed a reporter and pointed out that the first problem that power state-owned enterprise reform cannot bypass is power price reform.

The reform problem of electricity price is the institutional contradiction of “market coal and planned electricity”. It is also called “the contradiction between coal and electricity”. That is, the coal price is subject to the market and changes with the change of supply and demand, and the price of electricity is still in conflict between planned regulations. . In previous years, due to the impact of rising coal prices, power companies have suffered a lot and suffered widespread policy losses.

At present, the debt ratio of the top five major power companies has remained high, basically around 85%. In an interview with reporters including the China Economic Times, Chen Feihu, general manager of Guodian Group, said that the debt ratio of the power company is 75%, which is reasonable, and the debt ratio of the electric power central enterprises is obviously too high.

According to Li Junsheng, deputy director of the office of the State Power New Energy Research Institute, there are two major factors in the excessively high debt ratio of the electric power central enterprises: First, high coal prices and low electricity prices. Some companies suffer losses due to borrowing; Second, companies generally invest in projects. More, there is no scale benefit, it is difficult to be strong.

The unpredictable phenomenon in the power state-owned enterprises is that, even if the company suffers a loss, the debt ratio exceeds 100%, and it can't break the production. For example, in the case of a thermal power plant owned by a central power enterprise, the debt ratio has exceeded 120%. Theoretically, this The more the company loses production, the more serious it may be.

Li Junsheng believes that it is necessary to have both internal and external driving forces to reform electric power and state-owned enterprises. From the outside, it is necessary to deepen the reform of the electric power industry. In particular, it is necessary to do a good job of reform of electricity prices and inject energy into the power state-owned enterprises from the outside; internally, It is necessary to stimulate the power of state-owned enterprises to develop their own power. Only two kinds of driving forces can form a joint force, and the reform of power state-owned enterprises can achieve better results.

At present, the core of state-owned enterprise reform led by relevant departments is to establish a standardized governance structure in accordance with the requirements of modern enterprise systems, including the establishment of board of directors, the cadre personnel system, and the reform of investment and financing management systems. Li Junsheng said that for power state-owned enterprises, these are not the biggest problems currently faced, and the problems that need to be resolved at present are institutional obstacles.

Li Junsheng said that the problems in the power state-owned enterprises also include a lack of long-term and practical strategies. Formalism and utilitarianism are a lot of things, giving people a sense of ignorance, and the company’s managers are often unresponsive for strategic positioning and quality development. It is better to grasp economic indicators and image engineering achievements. This also brings some problems to the company, so the reform also depends on the complete transformation of ideas.

How to deepen reforms is still controversial

The previous round of reform in the power industry officially started 11 years ago. In March 2002, the State Council's No. 5 document proposed to “break the monopoly, introduce competition, improve efficiency, reduce costs, improve the electricity price mechanism, optimize the allocation of resources, promote the development of electricity, promote national networking, and establish a separation of government and enterprises under government supervision and fairness. The reform objectives of the “competitive, open, orderly and healthy development of the electricity market system” are to carry out reform tasks such as the separation of factories and networks, bids for access to the Internet, the establishment of electricity markets, the establishment of regulatory agencies, and the implementation of new electricity pricing mechanisms.

At the end of 2002, the State Council formally approved the “Division Plan for the Reorganization of Generation Assets” and established two power grid companies, five power generation group companies and four auxiliary industry group companies on the basis of the former State Power Corporation.

Reviewing the progress and effectiveness of the electricity sector reform over the past eleven years, all parties have different levels of understanding. Some people believe that the reform has mobilized the enthusiasm of all aspects of power management. During this period, the increase in new capacity and the speed of power grid construction are unprecedented in both China and foreign countries. At the same time, the reforms have enhanced the competitive awareness and vitality of power companies.

However, the stagnation of reforms in the industry in recent years has also been discussed. Some people think that for more than a decade of reforms, the effective incentive, restraint, and sustainable development mechanisms of the electric power industry have not yet taken shape. The institutional obstacles to power monopoly operations have not been completely eliminated. The order of the electricity market is still relatively chaotic. The administrative examination and approval and electricity price planning management methods still play a leading role.

In the last two years, the most significant event in electrical reform was the separation of main and auxiliary reforms and SERC’s withdrawal from the historical stage. The former subsidiary of State Grid and China Southern Power Grid’s subsidiary assets were stripped out, and at the same time the four subsidiary groups were consolidated. The above assets were injected into the merged two subsidiary groups.

In spite of this, grid companies are still questioned by alleged monopolies, not because of the natural monopoly of the power grid itself, but because of the failure to achieve separation between transmission and distribution. Some people in the industry believe that the power dispatch should be separated from the power grid companies. Those who hold this view believe that the power grid has kidnapped all power users under the condition that “distribution of power is not separated”.

In response, Liu Xin, head of the State Grid Power System, told the China Economic Times reporters that there was no “distribution” in the official documents of the relevant departments. If this is done, it would be tantamount to stripping nerves from the human body. In his opinion, this is unreasonable and unrealistic.

Liu Xinfang said that as far as the current reform of electricity is concerned, “the thinking of all parties involved is a matter of concern. It should be discussed instead of talking. The reform version that we are now seeing is the study, some are coffee shops, and some are even kitchens. None of them are official.” He believes that the current bizarre aspect is that people who stand at an overall height do not say that people standing at the perspective of their respective interests are saying that there is still no consensus on how to deepen reforms in the next step.

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