Analysis of Global Power Market
Analysis of China's Power Operation Market
Development Trends
1
2
3
4
Marketisation of
Power Price
Development
of Low-carbon
Technologies
Intelligent
Management System
Development of
Hydroelectric
Pumped Storage
Power Plant
On-grid Price Parity
5
of Renewable
Energy Sources
•
•
•
The power price marketisation is the core of recent power system reform. Under the guideline of power
system reform, the government will gradually introduce competition to the power pricing mechanism
except the power transmission and distribution segments, and open the power retail market to social
capital. Additionally, improving the power bidding mechanism and the price adjustment mechanism for
medium and long-term contract transactions will be the two important tasks of this reform. With the
maturity of the market, the proportion of market-oriented transaction in power market will keep
increasing and the power prices will follow the market mechanism gradually.
As a member of the "Kyoto Protocol" and the "Paris Agreement”, China has been facilitating the
implementation of emission reduction policies. With higher coal-fired power generation environmental
standards, the coal-fired power plants are encouraged to upgrade their energy-saving and low-carbon
technologies. Furthermore, the implementation of carbon trading will also motivate the coal-fired power
enterprises to improve their productivity and the efficiency of resource utilisation.
With the progress of technology, part of large hydropower plants such as the Three Gorges hydropower
plant, have already achieved automated management. In the future, more intelligent technologies will
be applied to the hydropower plants in order to increase the power supply efficiency and enhance
system flexibility.
With the higher level of power operation requirements and the rapidly growing market share of
renewable energy in the power market, the power system faces the problems of larger power
consumption and the wider gap between peak and valley time. Due to the characteristics of the
hydroelectric pumped storage power plants, they can transform the surplus power during the valley
time into the high-value power in the peak time and increase the utilisation hours of other energy
source power plants. However, the current installed capacity of hydroelectric pumped storage is still low.
Therefore, increasing the proportion of hydroelectric pumped storage installed capacity will be the
target in the future development of hydropower, which has also been mentioned in the "13th Five-Year
Plan of Hydropower".
With the development of renewable energy power generation technology, the cost of renewable energy
power generation in the rich-resource areas with low construction cost and good investment climate is
approaching the cost of thermal power. Under this circumstance, the government is planning to cancel
the subsidies for renewable-energy power and encourage the development of the renewable-energy
power plants.
FROST &
SULLIVAN
Source: Frost & Sullivan
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