Current situation and analysis of cross subsidy an

2022-08-17
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The current situation and analysis of China's cross subsidy and transmission and distribution electricity price

Zhongfa No. 9 clearly puts forward the key task of "orderly promoting electricity price reform and rationalizing the formation mechanism of electricity price" in this round of power system reform, and requires that the transmission and distribution electricity price be independently verified and the scope of government pricing be mainly limited to important public utilities, public welfare services and natural monopoly links. The government mainly verifies the transmission and distribution electricity price, makes it known to the public and accepts social supervision. The transmission and distribution electricity price is gradually transferred to the principle of "allowable cost plus reasonable income", which is verified by voltage level. Users or power sellers pay according to the transmission and distribution price corresponding to the voltage level of the electricity they connect. This document clarifies the formation mechanism of transmission and distribution price in the next stage, and today we will introduce the transmission and distribution price one by one, which belongs to the scope of government pricing and social supervision

Price is the reflection of market supply and demand, which is determined by two factors: the value of goods and the supply and demand of goods in the market. However, China's electricity price has undertaken too many public policy tasks. The original intention of the cross subsidy policy is to subsidize non-profit areas, protect people's livelihood and maintain social stability. With the development of economy, the price cross subsidy policy has exposed deep-seated contradictions, which has also brought confusion to the cost accounting of transmission and distribution price

I. Analysis of the current situation of cross subsidy of electricity price in China

cross subsidy is that when the electricity price of users is lower than the power supply cost and is borne by other users, it will form "electricity price cross subsidy". In this definition, the cost of power supply is the benchmark for the formation of subsidies. However, in electricity, due to the different positions of each user in electricity, the equipment cost, loss, reactive power compensation and maintenance costs are also different, so the loss and maintenance costs will also be greatly different, so the power supply cost of a single household can not be verified in fact, and it is meaningless. "Cross subsidy" is a subsidy policy for some non-profit and livelihood guaranteed users under the condition of government pricing system. The government should determine the subsidy principle and amount according to the number, electricity quantity and category of subsidized users, and subsidize directly through financial channels, rather than in the form of electricity price

theoretically, the transmission and distribution electricity price of residential users should be higher than that of industrial and commercial users, and the sales electricity price of industrial and commercial users should also be lower than that of residential users. In order to reduce the pressure on residents to pay electricity bills, China implements cross subsidies, and industrial and commercial users subsidize the electricity prices of residents. Power companies are the accounting center of electricity charges, and the electricity prices of various voltage levels are not calculated separately. Although residential users are the main body of cross subsidies, the scale of electricity subsidies and the costs of subsidies are very vague. Since the electricity selling price on the user side is set by the government, the price is decoupled from the cost, and the electricity selling price cannot reflect the cost change, nor can it realize electricity price transmission

figure cross tariff subsidies in China

assuming that the electricity consumption of industrial and commercial users is Q1 and that of residential users is Q2, the following subsidies will occur

(1) if the sales policies of industrial and commercial users and residential users are the same, and there is no cross subsidy, the electricity charge payable by industrial and commercial users and residential users is the product of their electricity and the corresponding electricity price

(2) theoretically, without cross subsidies, industrial and commercial users should bear less transmission and distribution costs than residential users because they are directly powered by their voltage level and their power consumption is much greater than residential users. That is, the sales electricity price of industrial and commercial users should be less than that of residential users. The electricity fee paid shall be the product of the respective electricity quantity and the corresponding sales electricity price

(3) after the implementation of cross subsidies, under the condition that the total electricity income remains unchanged, the electricity fee payable by residential users will be reduced, and the excess part will be borne by industrial and commercial users. Theoretically, the electricity charge that industrial and commercial users should pay is q1*p1+q2* △ P, of which q2* △ P is the part of cross subsidy

(4) at present, according to the actual collection of cross subsidies in China, the actual electricity charge paid by industrial and commercial users is q1*p1+q1* △ P. it can be seen that the premium paid by the policyholder is used for personal security, of which (q1- Q2) * △ P is the extra part paid by industrial and commercial users. This extra payment may increase the income of power companies

second, the advantages and disadvantages of cross subsidies

on the one hand, cross subsidies are conducive to the country's overall macro-control through price leverage and strengthen social stability and development. On the other hand, the prevalence and severity of cross subsidies have obvious adverse effects:

(1) it is not conducive to the upgrading of industrial structure and the adjustment of economic structure. In recent years, the massive development of high energy consuming industries has not only caused the waste of resources and environmental damage, but also increased the difficulty of industrial structure adjustment

(2) it is not conducive to guiding users to consume reasonably, and waste is common. Residents' electricity consumption has been low for a long time, which makes a considerable number of users form the habit of wasting electricity and have no awareness of saving. This lifestyle will not only be discounted in life, but also reflected in work

(3) it destroys the principle of fair burden and has some adverse effects on economic development to a certain extent. Since industrial and commercial users have been providing subsidies for a long time, industrial and commercial users generally believe that the electricity price is high and the burden is heavy. In the long run, it will have an adverse impact on economic development

Third, the impact of cross subsidies on transmission and distribution electricity prices

electricity reform is under way, and cross subsidies still exist and will exist for a long time in the future. The relevant documents of power reform clearly put forward that the power purchase price of users participating in power market transactions is composed of market transaction price, transmission and distribution price (including line loss) and government funds. Other power supplies that have not participated in direct transactions and bidding transactions, as well as electricity for residents, agriculture, important public utilities and public welfare services, will continue to implement government pricing. This shows that cross subsidies from other industries to "residents, agriculture, important public utilities and public welfare services" still exist

in addition, the power reform document proposes to reform the cross subsidies between different types of electricity prices in combination with the reform process of electricity prices. During the transition period, power enterprises declare the amount of cross subsidies between the existing electricity prices of various users. Through the transmission and distribution electricity prices, raw material manufacturers are also developing raw material formulas with faster response. Future electricity price consists of market transaction price, transmission and distribution price (including line loss) and government fund

therefore, there are two main sources of government cross subsidy funds in the future: one is the "transmission and distribution electricity price" set by the government, but this part may gradually disappear with the deepening of reform; The second is government funds, among which the renewable energy fund includes the cross subsidy funds for renewable energy in the taking and placing operation on the cooling station and rotary table, including photovoltaic

IV. the trend of cross subsidy of sales electricity price in China

adopting market biased pricing to solve cross subsidy is the practice adopted by foreign power markets. China's power reform also adopts the methods of attracting social capital investment, introducing market prices, and solving cross subsidies through market methods. We believe that the power market and electricity price will show the following trends in the future:

(1) the price reduction space generated by the power market reform will be used to reduce the electricity prices of large industries and general industry and commerce. At present, the price reduction space of transmission and distribution price reform is all used to reduce the end-user electricity price, and is not explicitly used to solve the problem of cross subsidies. In the future, the heavy cross subsidy burden borne by large industries and general industries and Commerce will be used to reduce the electricity price of large industries and general industries and Commerce in a planned way. Power generation enterprises participate in market transactions by transferring profits, and the resulting price reduction space is shared by users, power selling enterprises and other stakeholders

Premier Li Keqiang proposed to "significantly reduce the non tax burden of enterprises" in the 2018 government work report, in which the quantitative index of reducing electricity price was defined for the first time, "we should reduce electricity link charges and transmission and distribution prices, and the average industrial and commercial electricity price should be reduced by 10%". This is a strong signal released by policy orientation

(2) the electricity price of residents, low-voltage users and low load rate will be gradually increased. Low voltage users use more power system facilities and have greater transmission and distribution losses. In the future, low voltage tariffs will be gradually increased, which will not only reduce cross subsidies, but also promote users to save costs

(3) independent power universal service policy. To solve the cross subsidy of residential electricity price and the reform of power market, we need to make more clear provisions on the source and use of universal service funds, such as the collection of universal service funds or electricity surcharges, government financial expenditure or subsidies, government authorization to spend in the cost of power supply enterprises, etc

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