Electric Power Reform: Distributing and Distributing Homes is a Good Way

In the spring of 2002, the State Council issued the Notice on Printing and Distributing the Power System Reform Program (Document No. 5), which reorganized state-owned power assets. Today, the reforms have been going on for 10 years. In the past ten years, the country’s power generation regulations and power supply capacity have both significantly grown and strengthened, but there has been no substantial change in the power system. State-owned enterprises still monopolize the power market, and the NDRC still has full control of power prices.

It can be said that since 2002, the reform has only initially established a competitive pattern in the field of power generation, and the transmission, distribution, and sale of electricity still maintain the upstream and downstream integrated organizational structure. The power grid enterprises are still integrating power grid asset management, engineering construction, power system dispatching, and electricity and financial settlement. This situation leads to the difference between the domestic purchase price of electricity and the price of electricity sold in the world, and the return rate of assets in the power industry is very low.

In recent years, the contradiction between coal and electricity has intensified, power companies have suffered huge losses, industrial and commercial enterprises have a heavy burden of electricity consumption, and the development of new energy and renewable energy is constrained. The universal service of electricity is not in place. The prominent contradictions in a series of energy fields reflect that the emergence of such a power system has become a major obstacle to transforming the economic development mode, promoting energy-saving emission reduction, and developing a multi-ownership economy.

In view of this, the current power reform has reached an impasse, and where can we go next?

Xiao Bian thinks that under such circumstances, the "separation of households" should be a good recipe. The separation of transmission and distribution is actually one of the four goals mentioned in Document No. 5. However, this has not been implemented in the past ten years. Strictly speaking, the reform of the transmission and distribution system includes the separation and reorganization of grid companies, and grid prices, charges, costs, and accounting. Its essence lies in constructing a power grid system that can support power competition, and ultimately achieve complete separation of transmission, distribution, and sales, and form a four-separation power system for transmission, distribution, and distribution.

Redefining the allocation of transmission and distribution, in the view of Xiao Bian, the benefits include the following:

First, it can improve the operating efficiency of the electricity market. The reform can choose to split the path of the industrial chain, establish an electricity market that buys more and sells more, and improve the efficiency through market competition.

Second, encourage the development of new technologies and new energy sources. One of the major drawbacks of monopoly industries is that companies are ignoring the development of new technologies and new methods because they occupy the entire market. The distribution and distribution of electricity for the introduction of a number of companies in the power industry, in order to become the industry leader, new technologies and new energy is an important competitive method they can not ignore.

Third, to promote the improvement of electricity service standards. The excellent service level is a major winning factor for companies to occupy the market, as is the electricity market.

At the same time, from the experience of foreign power reforms, it can be seen that the “separation” of transmission and distribution does not change the original physical connection mode of the power grid, there will be no technical obstacles, and it will not affect the safety of the power system. Therefore, Xiao Bian believes that the "separation" of transmission and distribution will be a good medicine for power reform.

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