Abstract In 2017, only one State Grid Corporation of China reduced the company's electricity bills by more than 70 billion yuan throughout the year, and the reform dividend was effectively released. In 2018, the dividend for the "new electricity reform" will continue to be released. The incremental power distribution reform pilot in the “new electricity reform” is also rapidly advancing. National electricity...

In 2017, only one of the State Grid Corporations reduced the company's electricity bills by more than 70 billion yuan throughout the year, and the reform dividend was effectively released. In 2018, the dividend for the "new electricity reform" will continue to be released. The incremental power distribution reform pilot in the “new electricity reform” is also rapidly advancing. Within the scope of the State Grid's operation, 150 pilot projects have been approved, covering 109 cities. In the first batch of pilot projects, the company has signed 37 cooperation projects with related parties and introduced 36 private capital.

In 2017, China accelerated the “management of the middle, let go of the two ends”, and took measures to reduce the price of electricity for industrial and commercial enterprises. Only the State Grid Corporation reduced the company's electricity bills by more than 70 billion yuan throughout the year, and the reform dividend was effectively released.

Xuzhou Rothe Erde Slewing Bearing Co., Ltd. is a large electric power producer that produces slewing bearings and industrial steel balls. In 2017, for the first time, the company conducted “direct purchase of electricity” through the trading platform of the State Grid Xuzhou Power Supply Company. Over 60% of the electricity consumption from the power plant was “face-to-face” and the average price of electricity was reduced by about 2 cents.

"Don't underestimate the 2 cents, it brings us great benefits." Liu Yu, the company's electricity management leader, said that this alone will save the company's electricity bills by nearly 640,000 yuan. Last year, the state canceled the surcharge for urban public utilities, and reduced the cost of transmission and distribution. It can also save the enterprise 220,000 yuan.

China's sales price has long been implemented as a cross-subsidy system for “enterprise replenishment and urban replenishment”. Therefore, industrial and commercial users generally reflect “high electricity prices and heavy burdens”. In terms of electricity price structure, in addition to the “ex-factory electricity price” of power generation enterprises and the “transmission and distribution price” charged by the power grid, it also includes major water conservancy project construction funds, reservoir resettlement support funds, and renewable energy tariff surcharges.

According to data released by the National Development and Reform Commission, in order to reduce the energy cost of enterprises, in 2017, China canceled the surcharge of 35.3 billion yuan for urban utilities. At the same time, we vigorously promoted the supervision and examination of transmission and distribution costs, completed the reform of transmission and distribution prices of 32 provincial power grids, and reduced the cost of power grids by 14.5%. After the reform, the transmission and distribution price is worse than the current purchase and sale price, and the average electricity consumption is reduced by nearly 1 cent.

"The focus of the new round of power system reform is to build a unified, open and competitive power market system, and the State Grid is duty-bound." Wang Yanfang, a full-time spokesperson for the State Grid Corporation of China, said, "To make profits for enterprises and to optimize the allocation of resources for the whole society." At the same time, it also motivates us to further optimize investment, improve our efficiency and management level."

For companies, this means that after paying a fixed “over-the-network fee”, they can freely choose the power plant and buy electricity directly.

"More and more planned transactions of 'government pricing' have turned to market-based transactions of 'negotiating pricing' on both sides. The market competition pattern of buying more and selling more has taken shape." Wang Yanfang said.

Up to now, 27 provincial-level power trading centers have been established within the scope of the State Grid's business operations. The two-tier trading platform has been opened on a regular basis, and the trading varieties have continued to innovate. In 2017, the market transaction power was 1.2 trillion kWh, a year-on-year increase of 49.6%, accounting for 31.2% of the total sales.

In 2018, the dividend for the "new electricity reform" will continue to be released.

Since December 2017, temporary power users are no longer paying temporary electricity charges.

At the beginning of this month, the National Development and Reform Commission publicly issued the "Regulations on the Pricing of Transmission Price of Regional Power Grids (Trial)", "Measurement Methods for Transmission Price of Inter-provincial and Inter-regional Special Projects (Trial)" and "Guidance on Establishing Distribution Price of Local Power Grid and Incremental Distribution Network" In order to promote the reform of transmission and distribution prices in depth, and establish a transmission and distribution price system with clear rules, reasonable level, strong supervision and scientific transparency, it has taken a step forward.

The incremental power distribution reform pilot in the “new electricity reform” is also rapidly advancing. Within the scope of the State Grid's operation, 150 pilot projects have been approved, covering 109 cities. In the first batch of pilot projects, the company has signed 37 cooperation projects with related parties and introduced 36 private capital.

Recently, the second batch of incremental power distribution reform pilot projects have been announced, and the third batch of pilots will be launched soon. Meng Min, spokesman of the National Development and Reform Commission, said that it will strive to achieve full coverage of pilot cities above the prefecture level in the first half of 2018.

The industry generally believes that pushing down the price of electricity from the "reform" and "reduction of fees" and "lowering and reducing the burden" for enterprises will be the keynote that will remain unchanged in 2018 and in the next few years.

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