“Written on the front”
In March 2015, the CPC Central Committee and the State Council issued programmatic document of new round of reform–some opinions on further deepening the reform of electric power (the 9th), became the first symbol of China repeated starting after 12 years. This modified to promote nearly 1.5 years since the electricity market has become the consensus of the industry. Improvement of pilot provinces across the country, but there has been contention of flourishing situation, Chongqing, Guizhou, Shanxi and other places to change leaders for the construction of the electric power market has made valuable attempt. Particularly worth mentioning is, Inspector of Office of the Central leading group on comprehensive reform after the electric power system, was the industry that “reform of moderation” changed suddenly showing full acceleration potential, first regional electricity market trading rules landing Beijing, Tianjin and Tangshan. Select capital heavily promote electric power market construction, demonstrate high confidence and determination in promoting change.
9th new changed basic file set this path: three release (release price, placing operational and competitive link power plan), an independent (transaction independent) and the construction of a (market). “Plans” to “market” in the process, reduce electricity costs and achieved marked results in the real economy. 2015, the enterprises fall in electricity costs more than 150 billion yuan. Head of the pricing Department of the NDRC’s price Division said: “electricity prices in China there is still some price space, so we are also trying to tap potential, in order to help enterprises cut costs. ”
Power belongs to the special product and its stability concerns the economy and people’s livelihood in all aspects, change is typical of deep reform, tariff reform is “the hard stuff” in the “hard stuff”. Since it is a system mechanism reform, inevitably touches the vested interests, the process will be arduous. Change our way of “Tiger”, the surging News (www.thepaper.CN) today recommended a review from senior power long. In this paper, new electric reform faced with traditional institutions, departments, functions and strife, monopoly power, reform objective and route of the existing design, legal system construction, “highway five Tigers” must remove barriers and to create an environment, a strong advance, otherwise change to succeed.
The author thinks that electric power system reform is to build a new system, but the old system could not disappear naturally, self-conscious exit. Power reform means that management changes and reconstruction of management. In addition, the natural monopoly power to exclude competition, also rejected and resisted the market-oriented reforms to promote competition, the success or failure of the forces for change and the game of monopoly power, will directly determine the success or failure of reform. Electricity market is different from the ordinary commodity markets, not spontaneous, and reform is needed to break the shackles of institutional mechanisms, designed to support mechanisms need to be established and the market model, you need to adjust the deviation rectification and strengthening supervision.
New changing faces “highway five Tigers”, if not to win, “Tiger”, has not a hope of success.
On March 15, 2015, the Central Government issued the opinions on further deepening system reform of electric power (“2015”, 9th), issued a new round of reform of electric power to mobilize. A year later, finish analyzing practice and progress of the new round of reform, environment of deep reform is complicated and difficult task of distinctiveness. So, again studied the new modified files, and review recent transactions directly to practice, concluded that new change faces “highway five Tigers”, if not to win, “Tiger”, has not a hope of success must remove barriers and to create an environment, a strong advance or delay the strategic deployment of the Central Government, delaying the development and progress of the national economy.
One of Tiger: traditional system
Electric power system reform is to build a new system, that is, market-oriented power system, and the path is get rid of the old system, the scheduling system. New process of institution-building, is to get rid of the old system and exit the procedure. Old systems could not disappear naturally, self-conscious exit. Not to withdraw from the old system, the new system would be difficult to set up. Is the so-called “flowing”. From our view, reform “broken” determination is not complete, “State” will and hardships.
9th, and supporting documents should be the new reform programme of guides and top design. It is regrettable that these files is “established” in light of “broken”, “break” was too cautious and weak, to get rid of the old system and the underestimation of the difficulty of withdrawal, lack the necessary institutional top design and rigid measures to safeguard. In fact, the electricity plan called the orderly release, an independent trader, symbolic of power grid Enterprise release, to plan open processes dominate the market-building processes, power dispatch maintenance subject blur the situation, reform and other issues, reflecting top-level design fail to get rid of the old system is not complete. More and more people believe that this is a new change of top design flaws. In the practice of reform, these problems also become obstacles to reform the smooth advancement of constraints. Currently, some provinces to address the new basic attitude change is “wait and see” and “a step ahead of others”, and even “slow change”, “change” and “does not change” phenomenon. Next, the old institutional obstacles and interference problems in the construction of the new system will continue to highlight the new change becomes extremely difficult and complex, trends and success or failure is difficult to predict.
Why such a serious impediment to the old system to the new changes? There are three main reasons:
First, good fundamental orientation. Under the old system, has become established benefit structure. Get rid of the old system, the establishment of new institutions, it will definitely affect the vested interests of some sectors and enterprises. For example, power companies will lose their monopoly power plan management will lose management rights, power enterprises are faced with fierce competition in the market. It is easy to imagine, these departments and enterprises of the new modified what attitude to take. Years before, in promoting the implementation of electricity directly in the course of trade, the reformers realized that worried loneliness and helplessness. In fact, some companies that had been dedicated to promoting direct trade, but the real ally of the reform of enterprises vulnerable users only. If you have enlightened reform of local authority leaders, you’ll get superior support, could make a difference. But, unfortunately, some departments put countries disregard the overall situation, used to power the offside, if not to speak for the individual strong business principles. And reform forces usually less divided and more. In the 9th, and supporting documents in the process of drafting and revising, some enterprises and extraordinary energy sector strategy games are already well known to the industry. Fine grind 9th document and supporting files, is not difficult to find strong company with many traces of the influence of traditional institutional sectors, can easily find their standard benefits have been above national interests. In fact, the new round top design is a modified compromise and balanced outcome. Such a compromise and balance reflects the old system took advantage in the game, not conducive to successfully exit the dominant position of the old regime will bind process of building market, is likely to make the new change delayed, derailed, paid an immeasurable cost.
Second, plans and reliance on traditional management mode of thinking. Although the 2002 5th documents issued by the State Council, launched the electric power system reform, but reform stopped after the separation of grid and main and secondary (separation of grid does not fully complete, main and secondary even more so), market mechanisms are not established, planned system has been overwhelmingly controlled status. Decades of system power plan, power of market players and the Planning Department plan thinking deeply rooted, Chief plan of traditional management people, forming a set of relatively curing system and working mechanism, and handy, snap to use. Instead, carry out market reforms, requires in-depth research, exploration and hard to pay, but also to meet the challenges and take risks. In addition to the interest described above, a common thinking and the management of momentum and inertia and reliance on traditional management mode, but also impede the important reasons for deepening the reform of power. It is for these reasons, a number of planning authorities and relevant enterprises in order to care properly for, taking a passive wait-and-see attitude of the new modification, “no reform, reform and sustained reform” dodge the Central Government strategy. Recently, h provincial planning management departments out of developing electricity plans and pilot programmes to form trade group called reform, real reform, out of bounds assert authority, for national and local development is extremely irresponsible.
Third, the dual-track system under the old system. Under the new modified top-layer design, plan and market both for a transitional period. Transitional period, gradually open up the program and expand the market, and market double track. Under the condition of two-track system, power generation enterprises in sharing electricity and enjoy planning approval under the planning system electricity price, power companies can retain existing monopolies under the planned system, together with the relevant authorities to plan management mode of thinking and traditional dependence, market subject and relevant departments must tend to plan system, consciously or unconsciously resisting market reforms.
Way two: Department functions and disputes
In addition to the formation of relatively independent of the trading institutions, new bodies and new has not involved restructuring does not address function. On the whole, new power from various departments according to their respective “three” implementation responsibilities under the programme. At the national level: national development and Reform Commission reform; energy management in departments in charge of industry and market-building supervision; price departments responsible for tariff reform plan operating plan and Emergency Management Department is responsible for the development of electricity. Look, these departments are under the national development and Reform Commission, it seems, can coordinate and perform its function. However, the functions between the various departments are not entirely clear, overlapping functions exist and function conflicts is well known. Power reform started, functioning dispute intensified. For example, in the 9th, in the process of drafting, wrangling has already begun between departments; in the supporting documents, departmental files initiative led to the drafting of its head, trying to plug into contraband goods, and even designed a mechanism to consolidate and strengthen the functions of the Department, to exclude other departmental duties, utter disregard for other statutory duties and regulations the existing regulations of the State. Sector lobbied heads, heads back to speak, dished out the “reform to take into account practical and feasible, may not be fully in accordance with the Division of responsibilities, to dry up again” argument. So, departmental responsibilities are not clear circumstances, coupled with the “real” leader, will inevitably lead to practical difficulties of departments assumed responsibility in accordance with law, so as to lead to fighting each other, passing fight chaos, resulting in ultra vires act, breach of omission and collective inaction.
Have this problem at the national level, province level would only increase, it is difficult to escape, the so-called “exhaustion”. Municipalities, and regions are equipped with national development and Reform Commission (Department of energy), responsible for energy management, accepted the leadership of the National Energy Board on the business, but quite a few provinces in the Committee set up under the energy (electricity), responsible for energy and program management, on orders from the national development and Reform Commission on economic operation Bureau. Both have the backer, eyeball, think of themselves as “energy industry authority” or “power departments”. In addition, the National Energy Board with regulators in the provinces, some provinces also has a price. Energy management functions of dispute for a long time. Once modified, such as fuel, disputes the nature of functions further. H province recently to throw a special pilot programme for the reform of the Committee by letter, to resolutely implement the State Department reform scheduled to run in the name of trying to all other duties of the Administrative Department of energy in the Pocket and find ways to strengthen the planning approval. Urban energy-related management functions of strife in the provinces, is obvious.
Department functions with the dispute, resulting in a “good pipe, hard no one cares” situation, also create opportunities for monopoly. Some monopolies in fundamental interests, one will find in this sector, one will find the sector, looking for voice. The result, ignoring principles and honor individual departments were captured was kidnapped, spokesman of monopoly power; principled Department instead of overhead. Hence became “who all who daren’t, strong enterprise is in charge” of the cycle.
Electricity reform mean management changes and reconstruction of management, the management function should be adjusted accordingly. Some functions need to be added or enhanced, some functions need to be weakened and exit. This should be an important part of the reform of power. It is regrettable that new reform does not involve elements of organization and responsibilities. In fact, the change has just started, part of energy management functions regarding the ban on research, coordinated division of institutional responsibilities. With the deepening of reform, issues of duplication and overlapping functions will be further highlighted. This issue must be attracted great attention of the Central Government, introduced remedial measures in a timely manner, solve the functions of disputes in order to facilitate the change smoothly.
Way three: the monopoly power Australia 60 real estate mogul voice to the Government
Natural monopoly power to exclude competition, also rejected and resisted the market-oriented reforms to promote competition. Electric power system reform will no doubt blocked by monopoly power. This monopoly power including economic monopoly and administrative monopoly and the technical aspects of monopoly.
Economic monopolies mainly from the dominant enterprise or group or a larger market share. Electric power system reform will change set of grid electricity, electricity monopoly, scheduled transactions as one of the status quo, functional properties of electric power enterprises will change radically, must be fair and non-discriminatory open grid, giving up monopoly on buying and selling links. However, the power grid enterprises relying on monopoly formed a large, large number of associated industrial system, holds a large number of resources, giving up monopoly means giving up a vested interest means decomposition of the industrial system, there is no “GE’s own” spirit it is impossible to do. Meanwhile, power companies by virtue of its monopoly position and resources, has the unusual word in place, with sufficient operational energy, can sometimes affect and change the reform process and direction. Community focused on these questions: power companies can truly open network? Can voluntarily gave up its monopoly? Would manipulate Trade Organization? What kind of attitude and approach to reform? These variables can have a direct impact on power system smoothly. 9th, and supporting documents does not take effective measures to remove these uncertainties. Though relatively weak in power enterprise, not directly against electric power system reform, but it can also take advantage of group strengths, market share or cross-enterprise alliances, negative competition and collusive tendering, market manipulation and other practices, so as to increase the difficulty of reform and supervision.
Monopoly major change from related departments and local governments. Some departments may use reform leadership of ultra vires, exclusion of statutory functions according to law, so as to constitute the administrative monopoly; some functions may have functions for corporate endorsements, distort the reforms intended, which is another form of administrative monopoly. While the local government may have interests in the region, delays in implementation, execution or refusal to implement the national reform policies in disguised form files, market barriers, trade barriers, protectionism or sectarianism, optimal allocation of resources hinder power market in the country.
Is the power system must face the challenge of technology monopoly. Highly specialized in electric power industry, electricity reform in need of professional technical support. Especially in electric power, fair trading and power grid open programme for reform designed, rules relating to design and regulatory practice, expertise is indispensable. This not only in business and related fields requires considerable expertise, more crucial is the need for professional and technical support. Professional and technical consultancy in the country basically completed the separation of major, but still depend on a strong power in the business enterprise inevitably subject to the interest factor cannot or dare not speak up. In fact, technological advice willing vassals, subject to market resources, for widespread endorsement by party a. Reform of technical monopoly and economic monopoly is depth, economic monopoly of the power industry also on the technology.
Electric power system reform is the reform forces (reformers and non-monopoly stakeholders) and the game of monopoly power. Success or failure of their game, which determines the success or failure of the reform. To break the monopoly, break the monopoly power is both a reform package should include the necessary content, but also for the reform initiatives necessary to remove barriers, reduce resistance to reform.
Way four: reform objective and route design
What is the goal of new round reform? Read the 9th document and supporting files, you can see the new change objectives are diverse and different documents on the reform objectives and stressed, for example: the market system, energy saving and emission reduction and structural adjustment, technological advances, new energy elimination, human security, and so on. Design of multi-objective, looks perfect, but is actually easy to fuzzy primary and secondary, diluting the focus and weaken the policy relevance and operability. Any comprehensive reform, is a strategic change is bound to be pegged to the strategic objectives to planning and design, must be focused, given a choice, focus on resolving key issues, or easily lose, leading reform direction and on track, leading to strategic blunders. Author think: new electric modified should according to “18 big” decided on “market in resources configuration in the up decisive role” of spirit, set a compared core of fundamental target, that construction power market, let market decided resources configuration; and other of energy-saving emissions, and structure adjustment, and technology progress, and new energy elimination na, from property target are should in achieved fundamental target of based Shang reached. In fact, markets determine the allocation of resources, including the functions and objectives, market construction target achieved, other objectives will also be achieved. Therefore, the programmatic document about top design should make it clear fundamental objective, the supporting documents and rules approach should be closely linked to the fundamental target. Unfortunately, contrary to reality. This influence on the new modified is fatal.
The industry generally believe, 9th new changed basic file set this path: three release (release price, placing operational and competitive link power plan), an independent (transaction independent) and the construction of a (market). “Three free” and “independent” is the premise and Foundation of electric power system reform, which aims to break down barriers, build platforms, create conditions for the reform, is “broken”, but also “made”. However, the industry generally believes that new path planning of modified “break” is not firm, “made” is not clear; new electricity reform should learn from the spirit of reform and the pattern, should seriously implement the acquisition, General Secretary of the relevant energy industry “four revolutionary” speech, not “tender reform” or fragmentation, ambiguity.
Electricity market is different from the ordinary commodity markets, not spontaneous, and reform is needed to break the shackles of institutional mechanisms, designed to support mechanisms need to be established and the market model, you need to adjust the deviation rectification and strengthening supervision. This is electric power system reform and construction of the electric power market of international consensus. Current electricity price system, plans, management and power grid monopoly status, electricity market system is bound to power reform need to get rid of the “three big mountains”. Although 9th, file proposed has “three a release”, but, 9th, file in the so-called of “release placing electric business” and cannot solution grid monopoly problem, real to break grid monopoly on should fair no discrimination open grid, and grid reveals conservative stock market and not participation incremental sale electric market, even to consider lost distribution separate and scheduling trading institutions completely independent, or not only placing electric business cannot real release, also cannot break monopoly created loose of reform environment and fair of market environment. In addition, the “three free” plus “orderly” modifiers “orderly”, but given a context, send another message, weakens a central rigid; “an independent” is limited to independent institutions, and increase the “relative” modifier, produced similar results. In short, rigidity of the 9th, the discount, supporting files is more vague and broad. With China’s national condition, if the reform programme was not strong, a force for change is not strong, is inevitable in the real operation monopoly is in charge of the situation. Reforms once they have been manipulated by individual stakeholders, it will deflect, ended in failure.
Construction of the electric power market, electricity market must be planned, clear market model, transaction system, route step, regulation, risk prevention mechanisms, and other important issues. I had the privilege to listen to the two domestic top-class experts and scholars debate, deep understanding of electric power market in the domestic top there are serious disputes, exchange of research, casting the consensus. Some senior leadership believe that electricity markets are direct transactions. Some people think that, as long as the perfect trading systems and let go of the supply and demand sides, power markets will naturally form. These issues are reflected, 9th, and supporting files to avoid or ignore a number of key issues, there are many flaws and shortcomings. This should cause relevant sources including the national senior leadership attention, through the introduction of header files, to develop marketing plans with modified rules to further improve top-level design, top design for modified patch.
Construction of the electric power market, also to highlight the market’s dominance, not “ordered cuts, with plans to dominate the market,” path. Open plan, only one aspect of service in the market building. And the market itself is to “cut right to plan” and “leather plans.” It’s hard to imagine a long-term plan to hand power sector, will willingly give up their power, “change your own life”, vigorously promote the development of market. I can assert that, Planning Department-led market, is undoubtedly a wrong path.
Way five: legal system construction
Legal construction of China’s energy development and progress of construction work has also, promote the healthy and orderly development of the energy industry. However, from the overall situation, in the face of energy system reform of electric power system reform in particular the new situation, China’s energy legislation is lagging behind, it is urgent to speed up energy legislation. Main performance: a planned system of color and is quite a few regulations exist traces of two is part of legislation significantly behind development needs; third, energy market regulatory legislation significantly behind; four is the coordination between various energy laws is not enough, there is cohesion and even conflict. Meanwhile, the dispersion of energy management functions, legislative-led sector more self-contradictory, laws and regulatory problems, which resulted in laws conflict.
Many power workers are recognized in practice, and power, “a five cases” have not adapted to the current situation, some provisions have been detrimental to the actual work, but it has “negative effect”. Of course, against the electric power system, there are also many rules. Reform must be “under the law”. Legal system construction and reform should go hand in hand. Legal system lag status quo will inevitably impede the process and effect of the reform of the power source. Electricity reform is also urgent to speed up energy legislation on the legal construction, a clear direction, providing legal support for energy reform. Especially planned for release under the system of implementation of the energy legislation, in the guiding ideology, basic principles and specific provisions are contrary to what the market system does not meet or, needs deep changes. The national people’s Congress, the State Department and the Energy Department must pay attention to energy legislation, speed up the legislative process, effectively enhance the electricity regulations “State instead of waste.”
This article started in the “power law observed” (micro-letter number: higuanchajun), the surging authorized reprint of the press.