In the article on May 9, we discussed the relationship between negative commodity prices and the rationality of the rule and other investment and arbitrage.
Today we continue to discuss the issue of negative electricity prices, and this time we will focus on the photovoltaic itself. Put forward a point of view that not too many people have mentioned before: photovoltaic also needs a certain "red and yellow card" early warning system.
In 2016, the National Development and Reform Commission and the National Energy Administration launched the "Coal Power Planning and Construction Risk Early Warning Mechanism" and the "Wind Power Investment Monitoring and Early Warning Mechanism". In March
2016, the International Development and Reform Commission and the National Energy Administration issued the Notice on Promoting the Orderly Development of Coal and Electricity in China, which mentioned the establishment of a risk early warning index system for coal and electricity, and regularly issued risk early warning tips for provincial coal and electricity planning and construction. In July of
the same year, the National Energy Administration issued the Notice on Establishing a Monitoring and Early Warning Mechanism to Promote the Sustainable and Healthy Development of Wind Power Industry, and established a monitoring and early warning mechanism for wind power investment.
Generally speaking, the two early warning systems divide the early warning level into three levels: red, orange and green. Red means that the installed capacity is seriously excessive, basically can not be re-invested, and the approval is strictly limited. Orange means that there is a risk of excessive installed capacity, investment and construction need to be cautious, and the approval is postponed. Green means that the installed capacity is abundant, and the approval can be started in an orderly manner.
From the current perspective, the early warning mechanism of coal-fired power and wind power has room to be improved in many dimensions, such as indicators, evaluation and so on. However, under the specific historical conditions, especially under the background that the electricity reform has just started, there is no market construction, and the price of electricity on the grid and the utilization hours of power generation determine the project income, the establishment of early warning mechanism has played a certain role in preventing excess resources, guiding enterprises to invest, and eliminating backward production capacity.
In 2020, the National Energy Administration (so far) issued the last (2023) risk warning of coal-fired power planning and construction. Coincidentally, the wind power investment monitoring and warning (so far) was also released for the last time in 2020.
Since 2021, the problem of power shortage has been gradually exposed. Therefore, the early warning mechanism to guard against excess installed capacity has gradually been forgotten.
02
Does PV need early warning? Why should we put forward the early warning of photovoltaic when the early warning of
coal and wind power is gradually disappearing? There is no need to elaborate on the origin and development of
negative electricity prices. To be sure, the negative price of electricity just shows that the market rules themselves are working well, not a problem. Just like in the European energy crisis in 2022, the high electricity price itself does not mean that there are fundamental defects in the pricing mechanism of the electricity market, but to a certain extent, it is a reflection of the security of supply in the electricity market.
Specific to the domestic negative electricity price situation, this shows that in the duck curve (or canyon curve) this price trough period, the electricity load has not needed so much installed capacity of power generation. When the
thermal power units are basically shut down, the surplus is obviously the photovoltaic installation.
Negative electricity price is no longer an occasional problem in China. This not only refers to the phenomenon of negative electricity price in Shandong Province for many times, but also negative electricity price has appeared in several provinces where spot trial operation has been carried out. Even in other provinces, there is only zero electricity price for a long time, which is only because there is no negative electricity price in the design of market rules.
According to the data of California Independent System Operator (CAISO), in March this year, the phenomenon of power curtailment in California was frequent, with wind power and photovoltaic power curtailment reaching a record 606.2G Wh, up 31% year-on-year and 197% year-on-year. Wind curtailment is 34.
There are two main forms of curtailment in California. One is to abandon electricity in the whole system when the supply exceeds the demand of the system, and the other is to abandon electricity locally when transmission congestion occurs. In March, the proportion of power curtailment in the whole system increased significantly, reaching 31. The proportion of local power curtailment was 68.
When resources are excessive, even clean and low-carbon renewable energy should obey the law and reduce investment.
Reasonable guidance is imperative
. California is already changing. On April 15
this year, the California Solar Energy New Deal NEM (Net Energy Metering) 3.
Under the new policy, the average price of household photovoltaic surplus will be reduced from 30 cents per degree to 8 cents per degree, a reduction of nearly 75%. Under the guidance of the
policy, there was even a "rush to install" in California. Users are scrambling to install rooftop photovoltaic systems by April 15. After the news of negative electricity prices
in Shandong, there are many views that this will stimulate the development of energy storage, and then gradually level the growing peak-valley price gap.
This is obviously a rather idealistic design and possibility.
First of all, Shandong's energy storage policy and market environment (energy storage can participate in the spot market as an independent subject) can be said to be second to none in China, and the development speed is also very fast. But this has not been able to narrow the growing peak-valley spread. On the contrary, " Secondly, taking California as an example, when the electricity market, distributed photovoltaic and energy storage are more mature and perfect, California still lets the duck curve develop into a canyon curve. Obviously, starting from this actual case, energy storage has not played the role that everyone imagined. We have seen the results and choices of
California, and the inevitable end of policy intervention in the increasingly serious situation of light abandonment.
Price signal is one of the most important functions of electricity market. The appearance of negative electricity price indicates that there may be excess investment. Designing a similar "red, yellow and green" early warning system for photovoltaics should be fully considered and discussed.
This is not the only thing we need to do after the price signal appears. In addition to guiding investment, it can also guide users. In March
2022, the Shandong Development and Reform Commission issued the Notice on Matters Relating to Capacity Compensation Price in the Electricity Spot Market, which stipulates that before the operation of the Shandong Capacity Market, the capacity compensation fee for generating units participating in the spot market shall be charged from the user side, and the price standard is tentatively set at 0
per kilowatt-hour. State Grid Shandong Electric Power Company and Shandong Electric Power Trading Center issued the Announcement on Issuing Capacity Compensation Time-sharing Peak and Valley Coefficient and Execution Period in 2023, which completed the calculation of capacity compensation time-sharing peak and valley coefficient K1, K2 and execution period in different seasons in 2023, and introduced deep valley and peak coefficient and execution period. The period from 11:00 to 14:00 with the highest
PV output is basically classified as the deep valley period, from 10:00 to 12:00 in the morning and from 2:00 to 4:00 in the afternoon. The deep valley period coefficient is 0.1, and the peak period coefficient is 2.
The Shandong distributed photovoltaic investment calculation model will be adjusted according to the implementation period and electricity price changes, and the project income may be discounted. Users, on the other hand, will flow to lower prices as the execution period changes.
This is the positive effect of reasonable guidance.
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