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Annual Report on Electricity Market Reform on the World

SOURCES:Energy Research Observation Net  DATE:2010-11-05 CLICKS:

Abstract: As a part of the annual report series presented by State Power Economic Research Institute, "Annual report on power industry reform at home and abroad" focuses on the latest progress of power industry reform at home and abroad, and makes in-depth analysis on the major events, as to provide useful reference for China’s power industry reform in the future.

This report summarizes the reform progress in 2008. First, the latest progress of other countries’ power industry reform is reviewed, followed by detailed information and analysis on EU, Russia, USA, Japan and Australia. Then, the 2008 reform in China is summarized, and the general trend of 2009 is analyzed. Finally, based on the previous analysis, some proposals are made on China's power industry reform, as well as SGCC’s development under the new situation.

The report has come to the following conclusions.

(1) The general trend of reform in other countries remained unchanged this year? compared with 2007, but summaries and adjustments were made actively and carefully. The starting point of adjustments has put more emphasis on securing the power system security. The measures include perfecting the market competition mechanism, publishing inspiration mechanism to promote transmission network construction, and reinforcing market regulation, etc.

(2) Reviewing the experience and lessons of the current reform has been a major task in 2008. EU proposed the “Third Act Package” on further restructuring Europe's vertically integrated energy corporations, but member countries have such huge divergence on this proposal that the implementation of the Act is suspended. Japan has made comprehensive reviews and assessments on the reform, and decided to put off the plan of introducing option to all customers. The USA and Australia have made a series of in-depth reviews and analyses on the existing reform, and adopted several solutions to adjust and perfect the market reform policy and competition mechanism.

The 2008 power industry reform has revealed 5 major features as follows. ①The demand for cross-region/nation power trade promotes the expansion of power market. Cooperation and union of power trading companies have intensified. ②Cross-region/nation power network has been strengthened. System Operators are seeking for closer coordination and cooperation with each other to enhance system security and promote cross-region/nation power trade. ③Under the market environment, the wholesale price fluctuated largely with the changing fuel price. To guide the efficient use of electricity and facilitate the stable operation of power companies, many countries adjusted the regulated retail price to keep it in accordance with the fuel price. ④Considering energy security, fuel structure and environmental protection, many countries are seeking for new solutions of fuel diversification. Nuclear and clean coal-fired plants have come back to life. Renewable energy featuring in wind and solar is developing rapidly. ⑤Stimulated by the market and the scale economy, the giants in the energy field have accelerated expansion and merging. But at the same time, the claim for anti-monopoly has intensified, challenging the development of these energy giants.

(3) In 2008, due to the Beijing Olympics, the ice disaster, the earthquake and the tight coal supply, there have been no essencial movements in China’s power industry reform. Power market construction has virtually been suspended. The conflicts of power industry still focused on the price issue. In 2009, the possible movements might include the acceleration of “large-consumers trade directly with generators” schedule, reform of rural power service, adjustment of electricity price, and the more prudent implementation of “separating the ancillary one from the principle business”.

Key words: Electricity industry reform; Power market; Electricity reform abroad; Annal report; 2008
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