power sector reform doc addresses pivotal issues

context: The Central Commission for Comprehensively Deepening Reforms has reviewed and approved ‘Guiding Opinions on Deepening the Reform of the Power System and Accelerating the Construction of a New Power System’, yet the document is yet to be made public.

The new guiding opinion on power system reform resonates with contemporary developmental perspectives, says Liang Zhifei 梁志飞 Guangzhou Power Exchange Centre Research Department director. Its alignment of thought is encapsulated in three pivotal questions addressed in the document, he asserts, including

  • how long can coal power last?
    • the key lies not in a blind pursuit of expanding new energy sources at a rapid pace, but rather in a careful and secure transition
    • ‘traditional' energy can effectively be seen as a form of time-tested energy storage
    • the invaluable lessons gleaned from Germany's iterative process of phasing out coal and nuclear power, only to intermittently reintroduce coal power, offer pioneering insights
    • in stepping into uncharted territory guided by pioneers, it is best to embark on a pathway marked by the symbiotic development of traditional fossil energy and emergent new energy
  • how to reform the power market?
    • adapting to the evolving landscape and catering to the demands of emerging technologies and ecological considerations is paramount
    • a new electricity pricing paradigm presents both challenges and prospects, given the substantial oscillation between peak and off-peak periods, coupled with more extreme supply-demand fluctuations, emerging as fertile ground for the growth of industries focusing on new energy storage, demand-side responses and power consumption management
    • the advent of new entities and innovative business models necessitates a more comprehensive and inclusive market framework, enriched with diverse trading products 
    • this evolution is essential to adequately reflect the commercial value stemming from a multitude of energy sources and consumers
  • what is the role of the state?
    • two essential tenets define the state’s role: policy provisioning and foundational public service delivery
    • this trajectory necessitates a shift in conventional perspectives and relinquishes subsidies to the market's sway
    • the state's role unfolds as the architect of supportive policies, fostering the capacity subsidy mechanism and establishing an expansive platform that brings together stakeholders spanning users, new energy ventures and energy storage industries
    • this transition involves a shift from the state providing upfront guidance to providing backend facilitation