Analysis of Composition and Changes of Wind Power Prices in China

I. Concept definition

At present, the analysis of wind power prices often mentions two commonly used concepts. One is the target price, and the other is the benchmark price. Therefore, it is necessary to define these two concepts first before conducting wind power price analysis.

(I) Target price

The basic meaning of the target electricity price refers to the electricity price when the on-grid tariff reaches or equals to the average on-grid tariff of the new thermal power plant under the action of a series of policies and measures, which is called the target electricity price of wind power generation. The target electricity price is not a category of price classification, but merely a virtual price set to suit the research analysis. Its level depends mainly on the level of changes in the price of thermal power. Therefore, depending on the period, the target price will be different. In addition, there are still regional differences in target electricity prices. Therefore, different regions have different on-grid tariffs.

The determination of the target electricity price is actually to determine the national average price of thermal power. In general, the calculation of the most common main models in the country is currently selected to make the results more representative.

The Energy Research Institute of the State Development Planning Commission selected the coal-fired units without desulphurization facilities as the comparison object in the study of “China's Wind Power Economic Incentive Policy” conducted in 2002, and set its on-grid tariff at 0.35 yuan/kWh. That is, if The on-grid electricity price of wind power can be reduced to 0.35 yuan/kWh, which means that wind power can reach the level that can compete with conventional thermal power generation. This electricity price is the target price for wind power generation.

(II) Benchmark price

The benchmark price refers to the on-grid price without considering any preferential policies and operating in full commercial mode. To correctly determine the benchmark electricity price, we must first design a program that can reflect the reality and represent the direction of future development, so as to provide a scientific basis for further calculation, analysis and comparison. In the study, the benchmark scenario and its parameters were first determined. In this process, the trend of large-scale unit and large-scale wind farms should be considered.

The National Energy Research Institute of the State Development Planning Commission in the study of "China's Wind Power Economic Incentive Policy" conducted in 2002 assumed that the scale of wind farms is 100 MW, and 167 wind turbines with a single capacity of 600 KW are used for the calculation. The result is that the cost of power generation is 0.32 yuan/kWh. (20-year average), the average tax-inclusive electricity price is 0.642 yuan/kWh (20 years), and the average tax-exclusive price is 0.548 yuan/kWh (20 years).

Second, the composition of wind power prices and influencing factors

(a) The composition of wind power prices

Under China's current financial accounting system, wind power prices consist of the following components:

On-grid tariff = generation cost + tax + profit (after tax)

Electricity cost=depreciation expense+maintenance fee+wage and welfare+insurance fee+material fee+override loan fee+spending consumption+interest+others

Tax = VAT + VAT plus + income tax

Value-added tax = sales revenue × 8.5% VAT surcharge = VAT × 8%

Income tax = (sales revenue - cost of electricity generation - tax) × 33%

Profit = Revenue from electricity sales - Cost of electricity generation - Taxes

(II) Influencing factors of wind power price

There are many factors that affect the price of wind power, of which there are mainly five aspects:

First, the state of resources directly affects how much electricity is generated.

Second, the system cost, including two major parts of the unit cost and supporting facilities cost.

Third, the impact of policies is mainly on the preferential policies of the state on companies in taxation, financing, on-grid tariffs, etc., and whether new operating mechanisms have been introduced.

Fourth, the market conditions, that is, the market demand for wind power. China's wind power market is directly related to production costs and electricity prices.

Fifth, the calculation method, mainly refers to the use of dynamic calculation methods, or static calculation method; it is based on the operating period of the approved average price, or the difference between the repayment period and the repayment of the electricity price, the method is different, the electricity price is different.

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