Starting from 2024, thermal power generation will implement the new amenity mechanism electricity price. What does it mean for power plants and users?

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Starting from 2024, thermal power generation will implement a new mechanism for electricity prices. What does it mean for power plants and users?

As long as it relies on the combustion of fuel to eventually produce electricity, it is called a thermal power plant. For example, those that burn coal are called coal-fired thermal power plants, those that burn natural gas are called gas-fired power plants, those that burn garbage are called garbage-fired power plants, etc. Thermal power generation mentioned in this article refers to coal-fired thermal power plants, and the electricity generated is called coal power.

Today’s electricity has penetrated into thousands of households, whether it is residential users or industrial and commercial users. Without electricity, it can be said that it is difficult to move forward and a lot of work cannot be carried out. Any deviation from the specified material requirements for thermal power generation equipment could compromise operational efficiency.

When you use electricity, you need to pay electricity bills. Power plants and users are very sensitive to changes in electricity prices. From the perspective of users, it is natural to hope that the lower the electricity price, the better. However, from the perspective of power plants, maintaining appropriate electricity prices and making companies profitable can ensure the normal operation of power generation companies.

Under the influence of market electricity, it can be described as a world of ice and fire for users and power plants. Electricity prices continue to fall, and users have become the biggest beneficiaries. They pay much less for using the same electricity than before. The construction of a power plant requires a large amount of investment, and the power plant needs to sell electricity to recoup the investment cost in later operations. However, with coal and electricity prices upside down, many coal and electricity companies continue to suffer losses. Not to mention recovering investment costs, even normal production and operations are difficult to sustain.

Now, good news has come. Starting from 2024, coal-fired power will begin to implement capacity prices and electricity prices. The electricity price reflects changes in market operations and fuel costs, while the capacity price reflects the supporting and regulating role of coal power in the power system, ensuring the healthy development of coal power.

thermal power generation is a prominent source of energy
thermal power generation is a prominent source of energy

What is capacity electricity price?

According to notices from the National Development and Reform Commission and the Energy Bureau, capacity electricity prices are used to recover the fixed costs of coal power companies, including investment costs, labor costs, etc.

The policy stipulates that fixed costs are uniformly stipulated by the state at 330 yuan per kilowatt-hour per year, and are implemented in a certain proportion across the country. From 2024 to 2025, the proportion will be about 30%, and it can reach 50% in some areas. From 2026, the proportion of fixed costs recovered through capacity electricity prices in various places will not be less than 50%.

What does it mean for thermal power generation plants?

For example, if a coal-fired power enterprise has an installed capacity of 1 million kilowatts and the local regulations stipulate a recycling ratio of 50%, then the capacity electricity price is 165 yuan, and the annual capacity electricity fee is 100*165=165 million.

It can be understood that if this power plant meets the dispatch requirements and capacity power plant regulations, even if the power plant does not generate electricity for a year, it can still have an income of 165 million. Of course, it is impossible not to generate electricity for a year, but we can understand the meaning of capacity electricity price revenue of 165 million through this situation.

With the income from capacity electricity prices, thermal power plants have a certain degree of guarantee in recovering fixed costs, which is a big plus for power plants, especially power plants with weak market competitiveness. Research into the corrosion characteristics of thermal power equipment aims to mitigate the impact of corrosion-related issues on overall plant performance.

What does it mean for new energy power plants?

Photovoltaic power generation, wind power generation, etc. are new energy power generation and a kind of clean electric energy. Under normal understanding, they should be allowed to generate more power, which will help save energy and save coal consumption. However, due to the influence of coal power units and power capacity, power generation may not necessarily be allowed when wind or solar power is sufficient. Because the market can only use so much electricity, thermal power cannot provide capacity for new energy generation, resulting in the loss of new energy.

Under the regulation of capacity electricity prices, some thermal power units will free up power space and allow new energy sources to generate more electricity. This not only reduces carbon emissions, but also provides space for the development of the new energy power generation industry.

What impact does it have on users?

Users include residents and industrial and commercial users. Capacity electricity prices have no impact on residents. The electricity charges generated by capacity electricity prices are borne by industrial and commercial users. Effective management of materials and diligent monitoring are paramount to address the importance of corrosion control in thermal power plants.

For example, the capacity electricity price in a certain place is 165 yuan, a power plant has a capacity of 1 million kilowatts, the annual capacity electricity fee is 165 million yuan, and industrial and commercial users in a certain area consume 10 billion kilowatt hours of electricity. The capacity electricity fee that users need to bear per kilowatt hour of electricity is 1.65/100=0.0165 yuan, which is 1.65 cents. On the surface, users bear more of the capacity electricity price, but at the same time, we must also note that the electricity price, that is, the market electricity price, has been continuously declining in recent years. The overall electricity price borne by users will not increase, but will also decrease.

Thermal power generation relies on the combustion of fossil fuels to produce electricity
Thermal power generation relies on the combustion of fossil fuels to produce electricity