On July 9th, the National Development and Reform Commission (NDRC) held a national teleconference to discuss the deployment of energy for the 2020 summer peak period. The meeting undertook a comprehensive assessment and analysis of the current supply and demand situation of energy during summer peaking, focused on prominent challenges related to "reform, increased energy storage, and security,” and directed relevant departments to do their best to guarantee energy supply for the summer peak. Lian Weiliang, deputy director of the National Development and Reform Commission, attended the meeting and provided a speech. Liu Baohua, deputy director of the National Energy Administration, spoke on work requirements. The meeting was presided over by Zhao Chenxin, deputy secretary general of the National Development and Reform Commission. Representatives from the State Grid Corporation of China (SGCC) and deputy secretary generals from relevant provincial people's government liaison offices also made speeches addressing the topic of discussion.
Meeting participants recognized that the summer peak energy supply faces particular challenges this year due to the impact of factors such as changes in power demand due to the COVID-19 epidemic, a particularly strong rainy season leading to high levels of flooding, and significant fluctuations in international energy prices.
The meeting requested that all parties be attentive to the new situation and trends facing this summer’s peak energy supply, and focus on reform, security, and increased energy storage so as to ensure a stable energy supply.
The meeting emphasized three areas of focus for reform to strengthen the energy supply: electric power, natural gas, and coal.
To strengthen the electric power supply, it is first necessary to increase power trading reforms. Steps include promotion of mid- to long-term power contracts, acceleration of the trial operation and settlement of power spot transactions, promotion of peak and off-peak time-sharing transactions in a market-oriented manner, increasing the number of declared price segments in the spot market, and encouraging more ancillary services to be included in power trading.
Second is further reform of the electricity generation program. A plan must be studied and formulated which can connect priority power generation and priority purchase plans with market-oriented transactions, and pilot projects must be gradually developed in different provinces to promote orderly liberalization of the generation side.
Third is further reform of the incremental power distribution business. Extended services should be provided to users, new operations models of incremental power distribution enterprises explored, dispatch rules clarified, and orderly and safely operations ensured.
Fourth is further reform of energy storage and peak shaving mechanisms. Grid-side, generation-side, and behind-the-meter energy storage shared responsibility mechanisms must be clarified, pilot projects developed which combine power market reforms, and the cost of energy storage and peak shaving recovered through flexible marketized mechanism.
Fifth is further reform of clean energy utilization. A system of guaranteed consumption must be implemented, and improvements made to the consumption plan for projects both within and outside planning so as to guide the orderly development of clean energy.
To strengthen the supply of coal, the meeting emphasized it is first necessary to increase reform of the mid- to long-term coal contract system, increase the number of contracts signed, and make full use of credit means to strengthen contract performance supervision.
Second, reforms must be made to the coal reserve system. The coal reserve responsibilities should be combined with coal production, consumption, and imports, and strong effort made to increase coal reserve capacity.
Third, reform of the coal trading system is needed to effectively leverage the role of the National Coal Trading Center and promote the formation of a unified and standardized national coal trading market.
Fourth, it is necessary to strengthen coordinated supply guarantees in key regions, promote the establishment of a coordinated supply guarantee mechanism between major coal-producing provinces and major consumption regions, and form a long-term strategic cooperation relationship that guarantees supply and price stability across regions.
To guarantee the supply of natural gas, the meeting emphasized that first, reform of the natural gas pipeline network system must be strengthened. According to the "X+1+X" reform plan and goals, the supply of upstream resources from multiple sources and channels should be strengthened, and the formation of a "national network" accelerated, creating a pattern of full competition in the downstream sales market.
Second, natural gas contracting must be further reformed. Local governments and relevant enterprises must be required to complete yearly and heating season contract signings in a speedy manner. Upstream gas supply enterprises should guarantee the gas volume of all local residents according to the benchmark prices, and fully guarantee the supply of natural gas to residents who have engaged in "coal-to-gas" projects.
Third, the construction of gas storage facilities must be accelerated. Local governments and relevant enterprises should attach greater importance to such construction, strengthen overall planning and layout, accelerate the construction of gas storage facilities, and ensure the completion of expected targets and tasks.
In addition to discussions on electric power, natural gas, and coal, meeting participants also made arrangements for safe production and risk screening during the summer energy peak.
Heads of relevant departments and bureaus of the National Development and Reform Commission and the National Energy Administration, as well as leaders of relevant central enterprises, were in attendance at the main meeting. Deputy secretary generals of the relevant provincial (district or municipal) people's governments, and representatives from the regional Development and Reform Commission, Commission of Economy and Information Technology, Energy Administration, Transport Departments, Coal Departments (Bureaus) and Administrations of Coal Mine Safety, and the heads of related energy enterprises took part in the meeting at a sub-conference venue.