Analysis of Global Power Market

Analysis of China's Power Operation Market Overview of Pricing Mechanism of Power Market • . • From 2015, the new round of power system reform which forces on the marketisation has stated. In order to successfully promote the new round of power system reform, the new market-oriented power system and the original restricted power system are both effective in the current power system in China. However, the original power system which stipulates the power generation and the on-grid price is still the mainstream. In the original power system, the government will design the planned power generation based on power demand. National grid enterprises purchase power from power generation plants based on the plan at benchmark prices which are also regulated by the government. By introducing the marketisation into the power system, currently, the output of the plants consists of two parts, the planned output, according to the power generation plan, and the market-oriented output. In order to promote the development of clean energy, the NDRC and the NEA have published notices related to the orderly liberalisation of the power generation sector. The government stipulates that the existing large-scale hydropower, nuclear power, wind power, and solar power plants should be given priority in the dispatch of power. The total amount of prioritised clean power output in any given year should not be lower than the amount in the previous year or the average of those in recent years. Centralised Power Generation Plants Diagram of Pricing Mechanism of Power Market, China Provincial Power Grid Local Power Grid / Wholesale Regions Distributed Power Generation Power Distribution Network Market-oriented Generation Market-oriented Power Price Planned Generation / Precedence Generation On-grid Price / Benchmark Power Price FROST Power Transmission and Distribution Power Transmission and Distribution Price Comprehensive Power Supply Power Wholesale Price / Power Tariff SULLIVAN Non-marketisation Users Marketisation Users Source: Frost & Sullivan 50

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