Electricity coal prices have advantages and disadvantages

Recently, at the “2012 Energy Summit and the Fourth High-level Forum on Chinese Energy Enterprises”, Chen Zhongfa, Director of Policy and Legal Affairs Department of China Huadian Corporation, disclosed that although the contradiction between coal and electricity has eased, the five largest thermal power plants have suffered losses as of the end of September. The face is 47%.

“Since this year, the National Development and Reform Commission and the Energy Bureau have carried out research on the cancellation of key contracts and the promotion of coal prices in conjunction with relevant departments and units, and proposed a plan to promote the market-oriented reform of coal prices, which will be implemented in the near future,” said Chen Zongfa. "In 2012, due to the release of coal production capacity, increased imports, and declining demand, coal prices fell and coal-electricity contradictions eased, but thermal power losses are still 47% at the end of September."

In this regard, Chen Zongfa believes that the supporting policies introduced by the country as soon as possible, especially after the coal prices merge, will have a greater impact on power companies.

"The combination of the price of electricity and coal has both advantages and disadvantages, at least for the fair competition of power generation enterprises and the establishment of a standardized assessment mechanism. But after all, the disadvantages outweigh the benefits. The northeast and Shandong regions, which have a large number of key coal contracts, have great impact. The key is to reform the country. Policy support, power generation companies should be prepared to respond." Chen Zongfa said.

He said that the establishment of a real-time linkage mechanism for the establishment of coal prices, on-grid tariffs and sales tariffs should be established at the same time, the coal-fired power companies should be able to eliminate 30% of the power companies' digestion policies, and the electricity prices in the northeast, Shandong, and other regions, which have a high degree of impact, should be increased accordingly.

"If you want to merge, you should make up for the coal and electricity linkage history debt of 7-9 cents per kilowatt-hour during the period of 2004-2011 to digest accumulated losses and reduce liabilities. At the same time, the price of coal in Yunnan, Xinjiang and other regions will rise this year and should be properly increased. On-grid tariffs," suggested Chen Zongfa.

In addition, Chen Zongfa also proposed to clean up coal-related ** and charges, reduce transport and logistics costs, speed up coal emergency reserve construction, and improve the allocation of coal power capacity and coal market supervision mechanism.