The National Development and Reform Commission (NDRC) and the National Energy Administration jointly issued the "Notice on Promoting the Standardized Construction of Power Trading Institutions" (hereinafter referred to as the "Notice"), requiring that the shareholding reform of various power trading institutions be completed by the end of December 2018, and continue to promote the relative independence of power trading institutions. The Notice points out that the shareholding reform of power trading institutions should be promoted, with shareholders coming from various types of trading entities, and the capital share of non-grid enterprises should not be less than 20%, encouraging the improvement of the equity structure with non-grid enterprise capital accounting for about 50%.
It is reported that after the State Council issued the "Several Opinions on Further Deepening the Reform of the Electric Power System" on March 15, 2015, the Beijing and Guangzhou Power Trading Centers and provincial power trading centers were successively established, playing an important role in market-based power trading. However, currently only the Guangzhou Power Trading Center and the power trading centers of eight provinces (autonomous regions, municipalities) including Shanxi, Hubei, Chongqing, Guangdong, Guangxi, Yunnan, Guizhou, and Hainan are joint-stock companies. Other power trading centers are still wholly-owned subsidiaries of grid enterprises, and have not yet achieved relative independence and standardized operation.
In fact, this is a microcosm of the recent acceleration of opening up and breaking monopolies in the power industry. Following the liberalization of distribution and retail electricity business, this year also saw the cancellation of restrictions on foreign investment in grid investment. The State Grid Corporation of China and China Southern Power Grid Company are also promoting mixed-ownership reform and implementing equity diversification. Industry insiders believe that this will be conducive to fair competition and standardized trading in the power market, and more foreign and private capital will be seen in the future.
In recent years, the development of power enterprises has only appeared prosperous. On one hand, large power supply enterprises have launched overwhelming low-price offensives; on the other hand, coal power costs have been rising steadily. The survival space for small and medium-sized power enterprises (especially thermal power) is shrinking, yet they are forced into price wars. It can be said that the result of the fight between the snipe and the clam may benefit electricity consumers in the short term, but in the long run, it is easy to form control of the entire power supply market by oligopolistic power suppliers, including pricing power.
To this end, in recent years, the NDRC has accelerated antitrust enforcement actions in the power industry. In November 2017, the NDRC guided the Shanxi Provincial Development and Reform Commission to make a handling decision on the case where the Shanxi Provincial Power Industry Association organized 23 thermal power enterprises to reach and implement a monopoly agreement on direct power supply prices, and imposed a fine of 73.38 million yuan according to law. This is the first time in the 10 years since the Anti-Monopoly Law was promulgated and 9 years since its implementation that a fine has been imposed on large power enterprises.
In addition, other areas of the power industry are also accelerating the breaking of monopolies. Up to now, the total number of pilot projects for incremental distribution network reform in three batches has reached 320. While orderly liberalizing distribution and retail electricity business, the State Grid Corporation of China has also opened up investment in pumped-storage power stations to social capital, and is promoting the listing, restructuring, and introduction of strategic investment in its industrial companies.
