The reasons for this situation are divided into three levels. First of all, China's power shortage has little to do with the rise of world energy prices. Secondly, the direct cause of power shortage is that the price of coal and electricity is upside down, resulting in more and more losses for power generation enterprises, so power generation enterprises are unwilling to buy and store coal. Third, the deep-seated reason is that China's local governments are unusually heavily dependent on coal, so that the traditional development path of high energy consumption, high pollution and high carbon emission has not been fundamentally changed, and they will rebound as soon as they have the opportunity. At the same time, the abnormal high profits and high prices of China's coal industry need to be reasonably explained. Fourth, related but not fundamental factors also include the increase in industrial power consumption caused by international orders, the national "double control" requirements and the local power rationing for "rush operation" under the recent pressure of the "double control" traffic light warning system by the national development and Reform Commission.

 

(source: official account of WeChat public: new Zhao Huiyu.

 

First of all, China's power shortage has little to do with the world's energy shortage and price rise.

 

In recent months, rising international energy prices and consumer panic have continued to spread. When the global economy has not fully recovered from the epidemic crisis, the rise in commodity prices is caused by a series of common factors:

 

The upstream developed countries have released water one after another, which has doubled the global inflation pressure. Under the macroeconomic background of inflation, the rise of commodity prices is inevitable;

 

The economic stimulus plans of governments mean that the follow-up of large-scale infrastructure projects and the increase of manufacturing orders have directly driven the expected growth of commodity demand. However, behind the soaring international LNG and international coal prices, it is also related to the drive and manipulation of international short-term capital on the capital market of energy commodities;

 

At the same time, the "generation, transmission, transformation, distribution and utilization" of energy and electricity require a lot of labor, and many countries lack staff in the labor-intensive energy industry chain during the epidemic. For example, Britain is in great shortage of gasoline because of the serious lack of truck drivers for transporting gasoline.

 

In addition, major EU countries such as Germany and France have a high proportion of renewable energy, very fast coal removal speed and less guarantee of stable backup energy power generation. In some regions, due to climate factors, the supply of renewable energy is unstable and insufficient, resulting in significant fluctuations in electricity price and even power generation.

 

These situations are not the same as China's power shortage this year. Although China also imports coal, the limited import scale will not have a decisive impact on China's coal-fired power generation. In the first half of 2021, China's coal output was 1.949 billion tons, with a year-on-year increase of 6.4%. In the same period, China imported 140 million tons of coal, with a year-on-year decrease of 19.7%. From the perspective of direct causality, the international energy shortage can not constitute the fundamental reason for China's coal price to double or more.

 

Secondly, the direct cause of power shortage is the loss of power generation in power plants, resulting in insufficient willingness to generate power and imbalance between power supply and demand.

 

From the supply side, since the beginning of this year, affected by the national coal shortage, the price of thermal coal has continued to rise. Coal is the market price, and the electricity price is relatively fixed under national control. The cost of coal purchase by power plants increases, the price of coal and electricity hangs upside down, and the cost loss of power generation by power enterprises makes the power generation willingness of power companies as economic subjects fall into a low tide; From the demand side, under the influence of the epidemic, China's manufacturing industry has received an increase in international orders, which has greatly increased China's power demand. The imbalance between supply and demand is inevitable.

 

How serious is the upside down of coal and electricity prices? During the visit, the author learned that power generation enterprises generally generate electricity at a loss of 0.1-0.2 yuan. According to the profit data of national industrial enterprises above Designated Size from January to August 2021 released by the National Bureau of statistics, the total profit of oil, coal and other fuel processing industry soared by 2471.2% year-on-year, the coal mining and washing industry increased by 145%, while the power and heat production and supply industry decreased by 15.3%. In fact, the supply of coal and other energy in China is basically the same as last year. The national statistical report shows that "from January to June, the national coal consumption increased by 10.7% year-on-year, the coal supply is generally stable, the coal inventory has decreased, and the coal price is running at a high level."

 

It can be seen that although the coal demand increased in the first half of this year, there was no extremely abnormal coal demand. "Market coal" unscrupulously "follow the market", while power generation enterprises must bear the loss of upside down price due to national policies and price limit. This situation is worth reflecting. Reasonable reasons need to be asked for the high price and profit of traditional energy such as coal.

 

Third, the deep reason for this "power restriction" is that China still relies heavily on coal power.

 

If the reasons for the rise of coal prices are analyzed in detail, it can be found that under the background of "coal reduction" and "double control", China's energy supply is more dependent on coal this year than last year. In 2020, although the proportion of thermal power installed capacity in China has decreased to 56.58%, the proportion of coal power installed capacity has decreased to 49%. However, the proportion of thermal power generation is still close to 68%, and the proportion of coal-fired power generation rose to 73% in the first half of this year. Such power production structure determines the high carbon characteristics of power consumption structure. If the coal price fluctuates abnormally again at this time, the contradiction of electricity price will not be reconciled. The dependence on coal in China's energy structure is very easy to promote the abnormal surge of coal price.

 

In addition, the "visible hand" of some local governments acted during the "power rationing". Not all areas with "power rationing" are short of power. Some local governments are held accountable for the non-compliance of the "double carbon" strategy and the "double control" requirements, so as to make an unreasonable "sprint to meet the standards". The implementation of the new deal to deal with climate change has put pressure on local governments. In order to master the emission reduction efforts of various regions and try our best to achieve the goal of "double control", the national development and Reform Commission implements a regular notification and supervision system and issues a "traffic light list". According to the national development and Reform Commission's inspection of the "double control" of energy consumption in various regions in the first half of the year, the situation of energy consumption rising instead of falling in Guangxi, Guangdong, Jiangsu, Zhejiang and other places was announced. During the visit, we learned that the "double control" of a province in Southwest China is red, and the local government will inevitably take relevant measures of "sports carbon reduction".

 

There are "pains" in the process of reform, but we should adhere to the direction of reform

 

First of all, we should solve the short-term contradiction of "power rationing" this year. Whether from the power demand side or the energy supply side, the power shortage is a coupling event of "multiple causes and one result". This coupling event of "multiple causes and one result" has occurred before and will often occur in the future. The era of renewable energy has come. At present, European countries are also facing the problem that traditional energy has gradually retreated and the power supply of renewable energy is unstable. However, to deal with climate change, China's major country should bear the responsibility. It can't give up eating for some temporary difficulties, and can't strategically return to the era of relying more on coal. Of course, the urgent need still needs to be "coal-fired". At present, China urgently imports coal, natural gas and other emergency energy from neighboring countries. At the same time, Shanxi Province has signed medium and long-term coal supply guarantee contracts in the fourth quarter with 14 provinces (autonomous regions and cities). And increase the contribution of renewable energy to power generation. At the same time, we should reduce expenditure and vigorously promote energy conservation and emission reduction.

 

China has formed the mechanism of "market coal, planned electricity" for a long time. The "planned electricity" has the significance of ensuring people's livelihood and stabilizing production capacity. But the "market coal" price can not be left unchecked. The irrational price increase on the energy supply side must be followed up, supervised and regulated by the government. After the power rationing in September, the coal price still rose rapidly and reached a record high. As of mid October, it had doubled from the beginning of September and tripled from the beginning of the year. The price inversion of coal and electricity has further exacerbated the crisis. Fortunately, on the evening of October 19, the national development and Reform Commission launched a heavy "combined fist" to intervene in coal prices, organized a symposium on ensuring supply and stabilizing prices of key coal, electricity, oil and gas transportation enterprises, and stressed that malicious speculation by capital in power coal futures should be strictly investigated and dealt with. After a series of policy "combination boxing" messages were issued, several main contracts such as Zheng alcohol and coking coal fell on the evening of October 19. The national development and Reform Commission said, "we will make full use of all necessary means stipulated in the price law to study specific measures to intervene in coal prices and promote the return of coal prices to a reasonable range." these administrative measures in accordance with the law will effectively deal with the financial profit seeking momentum of energy commodities, temporarily solve the current dilemma and guard against irrational fluctuations in energy prices in the future.

 

The long-term overall goal of "double carbon" and "double control" must not be shaken. Recently, in his speech at the general debate of the 76th United Nations General Assembly, General Secretary Xi announced that there would be no new overseas coal power projects. Not only the power industry, but also the steel and coal industries restrict new projects. This not only reflects the significant significance of the "double carbon" goal for guiding investment decision-making, but also reflects China's determination to focus on carbon reduction and realize the transformation of coal withdrawal of energy structure.

 

It should be made clear that the real reason for China's power shortage this year is not the physical shortage of energy or coal, but the upside down of coal and electricity prices. Therefore, we should continue to carry out system reform from the perspective of rationalizing the relationship between coal and electricity. For example, the energy cost can be appropriately transmitted through the floating power price to promote the national awareness of energy-saving cost, but at the same time, the irrational price increase of coal enterprises must be strictly monitored. The power rationing problem is essentially a problem in the process of reform. It should be said that to a large extent, it is caused by the strict requirements of some local governments that both want to develop the traditional resource economy and can not take into account the "double control" goal this year.

 

As a major carbon emitter, the development of thermal power must still be restricted and must not be relaxed. We should not vigorously approve and build a large number of new thermal power units due to the temporary rise in coal prices, because once the thermal power units are put into operation, it is difficult to retire in the short term. As many energy academicians and experts such as Du Wanxiang and Yang Fuqiang said, China's original thermal power installed capacity has been enough for the 14th five year plan. "In principle, no new coal-fired power projects will be approved in the 14th five year plan except for technical reserves and demonstration projects."

 

It must be deeply recognized that China's current installed capacity of thermal power is huge, and it is still highly dependent on thermal power construction and installation. Considering that there are still about 100 million kilowatts of coal-fired power units under construction and approved to be built in China, when China's renewable energy use encounters the current difficulties of unstable power generation in Europe and other countries in the future, it is very easy to turn to the original path dependence - that is, to return to the old road of expanding coal-fired power installation. This is absolutely impossible, but now it seems very easy to happen.

 

We should strictly implement the existing laws and regulations on environmental protection and electric power. First of all, these laws and regulations are our country's laws and policies on environmental protection and greenhouse gas emission. From last year to this year, as the goal of "double control" is not easy to achieve, the national development and Reform Commission warned relevant provinces, which exacerbated the impulse of local power rationing. However, the goal of "double control" is essentially a very important and necessary measure to plug the loophole that only stipulated the carbon emission intensity but not the total carbon emission, which frustrated some local governments' plans to boost GDP through repeated construction of high-energy consuming and low-level projects. Of course, this also brings short-term pain in power consumption, but if we do not adhere to the "double carbon" strategy and the "double control" goal, the short pain will become a long pain. Of course, laws and regulations also include the requirements for compulsory and orderly power consumption stipulated in the power law to ensure the basic domestic power consumption of residents. As in the northeast, although there are some local reasons for limiting residential power, it is essentially an illegal act and should be prohibited.

 

With regard to the proportion of coal-fired power and renewable energy, we should increase the accountability of local governments. Local governments should comprehensively consider resource conditions, economic development level and other factors, design their own renewable energy consumption responsibility weight that matches the "double carbon" goal, is more strict than the central government and is not technology neutral, give full play to local subjective initiative, and "bottom-up" force coal power to withdraw, so as to accelerate the development of renewable energy. In 2020, although 30 provinces and regions in China have completed the renewable energy consumption responsibility weight issued by the state, due to the low target setting, the increased consumption pressure on power grid enterprises, power generation enterprises and other obligatory subjects is not significant. Local governments should, according to their own conditions, strengthen the reform of power supply side year by year, so as to realize partial linkage of coal and electricity prices. The soaring power price will affect the enhancement of power saving awareness of end users to a certain extent, and give full play to the price leverage of market economy in the upstream and downstream.

 

Fine management of power supply side and demand side in the digital age. This includes economic management and the use of digitization. Adhering to the principle of no random power outage for domestic electricity, we should promote precision consumption app on the consumer side to realize "complementary gas and electricity" heating, etc. Household appliances such as new air conditioners shall have the function of remote opening through app. Accordingly, a load regulation control center is established to remotely regulate these controllable loads to realize "load following source".