Analysis of Global Power Market

Analysis of China's Power Operation Market Value Chain Analysis (1/2) • • • China's power market consists of four parts, including power generation, power transmission and transformation, power distribution and sales, and power consumption, and each part has its own development goals. From the perspective of industrial chain, China's power industry includes equipment manufacturing in the upstream, power plant and transmission network design and construction in the middle, and operation, maintenance, inspection and maintenance in the downstream. In order to facilitate the inter-province power transaction, new energy power consumption, and the marketisation of power price, the Beijing Power Exchange Centre and Guangdong Power Exchange Centre are established by the State Grid and Southern Grid. State Grid and China Southern Power Grid are major participants in power distribution and sales in China. However, power distribution and sales have been open to private sector capital with the reform of power market. Value Chain of Power Industry, China Power transmission Structure Power generation Optimise site selection Encourage investments in renewable resources • Stability Rigid emission standard power sources Objects Economical maintenance cost • Higher utilisation ratio and transformation Safety, reliability, energy saving and economical Optimal plan of power grid Adoptable to various types of Power distribution and sales Power consumption Scientific and economical plan of power grid Faster response to malfunction • More reliable power supply Higher quality power • Reliable and economical equipment • Flexible pricing strategy China Huaneng Group China Datang Lower transmission loss Economical and reliable maintenance cost Higher transmission stability management More competitive marketing strategy Customised services Allow users providing excess power to grid Control power supply based on credits of users • Support distributed energy resources and storage element China Huadian Major Market Players China Guodian State Power Invetment Chian Resources Power Guohua Power SDIC Power* China General Nuclear Power Industry Chain Upstream State Grid China Southern Power Grid State Grid China Southern Power Grid China Resources Power Sales Huaming Power Guangshou Hengyun Integrated Energy Sales Hailan Power SDIC Gansu Power Sales Power Consumers Midstream Downstream Maintenance of power plants Maintenance of power grid Inspection and repair Source: Frost & Sullivan Segment Manufacturing of construction materials Manufacturing of power equipment *SDIC: State Development & Investment Corporation Power FROST Survey and design Contract of construction projects SULLIVAN 44

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