2022: What can we expect from the power industry?

2022-06-06 0 By

Polaris Power Transmission and Distribution Network News: Improving the carbon market and strengthening the “administrative power + market” may be the key to help China’s energy industry pass the “corner” smoothly in 2022.(Source: wechat official account “Energy Magazine” by Wu Weinan) To a new starting point, the 2022 energy system will continue to achieve marginal improvement.We look forward to easing the contradiction between energy supply and demand, making breakthroughs in energy market reform, making concerted progress between traditional energy and fossil energy, making the new power system more diversified and intelligent, and making more prudent and firm moves towards dual carbon.The energy industry has reached a consensus on a dual carbon implementation path in 2021.The Central Economic Work Conference gave a clear strategy: “It is impossible to achieve peak carbon neutrality at the same time.The gradual withdrawal of traditional energy sources should be based on safe and reliable replacement of new energy sources.Based on China’s basic national conditions, which are dominated by coal, we should make clean and efficient use of coal, increase our capacity to absorb new energy, and promote the optimal combination of coal and new energy.We will focus on green and low-carbon technologies.”In short, until clean energy takes over, “fossil fuels can’t be phased out overnight.”After decades of development, traditional fossil energy is an important support for the energy system.If we do not consider the case of low carbon environmental protection, we can achieve two elements of cheap and stable.Low carbon environmental protection breaks the traditional stable system of fossil energy.China’s proposal to build a new type of electric power system with new energy as the main body faces challenges in technology, economy, management and operation mode.At present, the biggest challenge of new power system is the safe and stable operation of power grid.Under the tone of stable economic growth, as the basis of social and economic operation, the power grid should not have one or more power shortage accidents like 2021.In the case that electrochemical energy storage, pumped storage, power grid dispatching, nuclear power and other types of power sources will not have major technological innovation and installation changes, with the increasing installation of new energy, the required coal power installation may increase to a certain extent.Until the carbon peak in 2030, there will be no significant pressure on the “dual carbon” target.But after 2030, if the power system remains heavily dependent on coal, we could see another peak in emissions.Of course, if all coal power is converted from baseload to peak-modulated power, the increase in coal power installations will not increase carbon emissions.But such conditions are far too ideal for now.First, it requires all coal power units to undergo flexible transformation;Second, the power market reform must be perfect, so that the coal power unit can benefit from the auxiliary service market and capacity market and complete the investment return;Third, even if the above two conditions are met, the output of coal power units may increase.In the recent European electricity market, the carbon price has soared to 100 euros/ton, and coal power plants are still operating in large numbers to participate in the electricity market.Coal power is still profitable because electricity prices are so high.”The gradual withdrawal of traditional energy sources should be based on the safe and reliable replacement of new energy sources.”The Central Economic Work Conference set the tone of “decarbonization”.This ensures energy security and stability for years to come, but also means the transition will be more difficult.The elimination of the irreplaceable role of coal power means that the traditional one-way flow power system of “generation, transmission, distribution and use” needs to be completely overturned.”Distributed” energy is a new way to solve traditional problems.But distributed energy has been slow to scale.In technology, distributed energy system puts forward higher requirements for distribution network.China has built the strongest large power grid in the world, but the investment and construction of distribution network are relatively lagging behind.That is about to change.In November 2021, China Southern Power Grid Corporation issued the “14th Five-year plan” of China Southern Power Grid.According to the plan, the overall planned investment of China Southern Power Grid is about 670 billion yuan, of which distribution network construction is listed as the focus of the 14th Five-Year Plan. The planned investment is 320 billion yuan, accounting for almost half of the total investment.After overcoming the technical challenges, the development of distributed energy needs to overcome the obstacles of economic security.For distributed energy system, the biggest demand is to sell excess power and buy power shortage on the basis of self-use, so as to ensure the safety of the whole small system and reduce the cost of electricity.NDRC 1439 document (” Notice of the National Development and Reform Commission on Further deepening the Market-oriented reform of coal-fired power grid price “) completely open industrial and commercial users to enter the power market, the large-scale development of distributed energy has become less and less obstacles.If the power system reform can be accelerated in the real sense in 2022 (distribution network reform + power market reform), distributed energy does not even need special policy encouragement, can spring up like bamboo shoots after a spring rain.In 2021, the implementation of the policy of “energy consumption” dual control is controversial.Indeed, in China’s current fossil-dominated energy mix, controlling “energy consumption” is tantamount to controlling carbon emissions.But this kind of one-size-fits-all governance mode, for clean energy production, consumption have produced a huge blow.The Central Economic Work Conference also called for “creating conditions for an early shift from dual controls on energy consumption to dual controls on total carbon emissions and carbon intensity”.Of course, the “dual control” of carbon emission and intensity is more difficult than the “dual control” of energy consumption.The first problem is the monitoring and measurement of carbon emissions.For example, how much carbon is emitted by various industries, companies and institutions?We almost have no written, authoritative testing methods and evaluation standards for these links.To establish a set of effective system needs not only administrative system, but also the corresponding technical means.From the perspective of implementation, the central Economic Work Conference proposed that “newly added renewable energy and raw material energy should not be included in the total control of energy consumption” is an effective transition method.What is more desirable is the improvement of carbon trading.2021 is the first year of national carbon trading, and there are many controversies.Problems such as the power generation industry’s participation in trading, free distribution of carbon quotas, fraud scandals, price restriction, and extremely low trading volumes have been exposed.At present, carbon trading does not have the ability and function of carbon constraint.In the short term, it is imperative that all relevant industries be included in a national carbon market.Although the “dual control” of the total amount and intensity of carbon emissions is still lacking in sufficient details, it is possible to allocate carbon emission quotas to enterprises based on the total amount and by industry under the current technological conditions.From the experience of European countries, a perfect carbon market requires an effective combination of “government administrative means + market regulation”.In Europe, carbon prices are also rising as the way carbon allowances are given out — from free to paid, gradually shrinking — changes.In such a market environment, European enterprises have invested a lot in the research and development of carbon reduction technologies.In Europe, hydrogen energy is regarded as an important technical support for carbon reduction in non-power industry, and European hydrogen-related enterprises, policy support and technological level are also relatively leading in the world.For China, in 2022, we need to start from the breakthrough of the carbon market, leverage the reform of the electricity market with the construction of the carbon market, promote the scale of green electricity trading, promote the progress of carbon reduction and carbon fixation technology, and form a new assessment method of the total amount and intensity of carbon emissions.At the beginning of 2022, China’s economic development is also facing triple pressures of demand contraction, supply shock and weakening expectations.In addition to the uncertainties of the global epidemic and a more complex external environment, China’s economic development faces enormous challenges.As the foundation of the national economy, the energy industry has great responsibility.We should not only continue to promote market-oriented reform to increase market vitality, but also need administrative regulation to solve the problem of market failure, so as to help China’s energy industry successfully pass the “corner”.2022: What can we expect?Disclaimer: the above content is reprinted from Polaris Power news network, the content does not represent the position of this platform.National Energy Information Platform Tel: 010-65367702, email: hz@people-energy.com.cn, Address: People’s Daily, No.2 Jintai West Road, Chaoyang District, Beijing