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The Practice of Generation Schedule in China Power Market

CHINA ELECTRIC POWER RESEARCH INSTITUTE. The Practice of Generation Schedule in China Power Market. Dr. Xiaomin Bai China Electric Power Research Institute bxm@epri.ac.cn. 2007-09-19. 1. The Status of Power Systems 2. Reform Procedure 3. Generation schedule method. System Interconnection.

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The Practice of Generation Schedule in China Power Market

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  1. CHINA ELECTRIC POWER RESEARCH INSTITUTE The Practice of Generation Schedule in China Power Market Dr. Xiaomin Bai China Electric Power Research Institute bxm@epri.ac.cn 2007-09-19

  2. 1. The Status of Power Systems 2. Reform Procedure 3. Generation schedule method

  3. System Interconnection 1.1 The Status of Power Systems NE AC NC XJ DC NW AC SD AC Back to back Back to back or DC Back to back CC SC EC 3DC AC AC DC DC XZ Back to back SC FJ sea cable HaiN

  4. 1.2 2004 Max Demand of 7 major systems Max Demand 285120 MW

  5. 1.3 Capacity and yearly Increments Install Capacity GW Increment of Capacity

  6. 1.4 Major Benchmarks of Generation Capacity 1987 -- 100GW 1995 -- 200GW （1996 Rank 2 in the world ） 2000 -- 300GW 2004 -- 400GW 2005 -- 500GW 2006 -- 622GW

  7. 1.5 Power system development The power industry grows in a very fast rate, by the end of 2006, the total installed generation capacity reached 622GW，the total annual energy production reached 2,834.4 TWh ( increased 13.4%), both ranked second in the world. However, China has experienced both energy surplus and energy shortage in the history. During 1997-1999, the power capacity in China was so much that some plant had to shut down half of their units. On the other hand, in 2003-2005 China has been suffered by energy shortages, 26 provinces had to shed load in the worst situation. Since large amount of generation plants will be installed, we expect the energy shortage problem will be alleviated in 2007.

  8. 1.6 Power Systems development Main reason is owing to the peak demand can not be satisfied during some periods in some regions. In year 2003, installed capacity increased 7.8%, however the power demand increased 7.6% more than the capacity. The situation of power supply shortage continues in year 2004. The investment of generation speed up obviously.The installation of Capacity expected to increase around 30GW~40GW each year. In fact, it was 65GW in 2005 and 100GW in 2006. The target of 950GW in 2020 can be reached earlier than expected.

  9. 2.1 Reform Procedure • Started deregulation in late nineties. 6 provincial power markets were in trial operation in 1999-2000. Their experience were useful for further development. • In 2002 an order was issued for power industry reform. Restructure of Chinese power sector has been completed in 2003. SGCC, CSGC and 5 power generation groups are formed, 5 regional grid companies are established in the SGCC. • Regional grid companies are required to establish regional Electricity Dispatch and Trading Centers. In 2004 NE China and E China has established their dispatch and trading center and in trial operation, other centers will be established in 2-3 years.

  10. 2.2 Generation status: • The rational of total of 5 generation groups is 38.79% • Other central government controlled enterprise is about 10% • Local government controlled enterprises is 45% • IPP is 6.21% • Most of units are state owned and controlled, it is about 90%。

  11. 2.3 Transmission and Distribution systems • provincial level 31, regional level 7, monopolize controlled by SGCC 80% and CSGC 20%. • district and county level 3211, most of them are controlled by SGCC and CSGC. • hierarchical controlled system: 5 level, one national control center, 6 regional control center, 28 provincial center (except Beijing,Tianjin, Tibet), about 3000 district and county center. • 10kV and above customers are reached 1M

  12. 00-02Balance Local Shortage 1988-1996 Shortage alleviated 97-99 Excessive Cap 1980-1987 S-Shortage Shortage 2.4 System Install and Load Balance Status 94-97 simulation 98-01 Pilot Provincial 02-simulation Regional PM

  13. 2.5 System Install and Load Balance Status alleviated Still experience shortage Serious Energy shortage 2004 2005 2006 2007 0115 NE-PM Energy saving dispatch 0403 EC-PM 04 SC-PM CC-PM Construction. NC, NW PM Research

  14. 2.6 regional power market NE China Grid Company has been the first regional power market in China, it is characterized as a sole wholesale power market in the region. The second regional power market is East China, it is characterized as a hierarchical power market, in which provincial power markets would coexist with regional power market. Other regional power markets will fall into either NE mode or East China mode.

  15. 2.7 North China Power Market • By the end of 2002, capacity of the region is 39400MW，with hydro 5410MW，about 13.7%，thermal 33990MW，about 86.3%。peak unit, frequency adjust units and security reserve units is 4282.5MW，about 11.10%. • The installed capacities for different Generation groups: 5 groups: 19429.5MW，50.35%. Huaneng 5025MW，13.02 %；Datang1925MW，4.99%；Huadian 5757MW，14.92%；Guodian 3261.5MW，8.45%；Zongdiantou3461MW，8.97%. • By the end of 2005, capacity of the region is 43840MW，with hydro 5780MW，about 13.7%，thermal 37730MW，about 86.3%。Wind power 340MW.

  16. 2.8 The Main Features of NE: Initiated simulation operation on Jan. 15, 2004 • Unified control system for the regional system, the three provincial system are considered as settlement center • Annual and monthly bidding for generations are tested. • Three stages for the market model: single buyer model, 20% of total generation competition, two part tariff and full generation competition, in the future, one part tariff and full generation competition,

  17. 2.9 East China Power Market • In end of 2006, capacity of the region is 97184.1MW，with hydro 1234.45MW，about 12.7%， thermal 7748.84MW, about 79.7%，others 7.55, including wind, pump, nuclear and gas turbine. • 79 utilities with 229 units, the differences of installed capacities for Generation groups are not too much, the largest group, Zhejiang energy group 12.3%

  18. 2.10 Installed Capacity EC

  19. 2.11 East China Power Market • Initiated simulation operation on May 2004 171 registered units, 59 power plant, bid for power, others (41 unit maintains, 21 without bidding systems and 3 do not attend competition), 43388MW , about half of total capacity. Provincial system buy power from regional market. About 10% generation is settled according market price. Partial generation competition, 85% annual contract, and 15% by competition. • Trial operation on April 2006 221 registered units belong to more than 70 utilities, 156 of them bid for power, 60000MW, Full generation competition plus CFD model. About 10% generation is settled according market price.

  20. 2.12 The Main Features of EC: • Regional market system, the three provincial systems are considered as settlement center. • Provincial systems act as buyer to purchase generation from regional control center. • Mainly contract trading, auxiliaryspot trade. Annual and monthly contract bidding, day ahead spot market and real time system balance. • Regional trade center and provincial settlement center, monthly contract bidding performed at regional trade center, annual contract and real time balance are performed in provinces respectively. • Initial stage market model: single buyer model, 20% of total generation competition, two part tariff and full generation competition, are considered in the future.

  21. 2.13 The Main Differences: • North China system mode: annual and monthly trading, full generation competition, two part tariff. • East China system mode: annual contract and monthly trading, day ahead trading, full generation competition, however only part of generation are settled according to biding(90% by approved price, 10% by competition, one part tariff.

  22. Main feature of 3 Power markets

  23. Main feature of 3 Power markets

  24. 3. Generation Schedule Methods The 11th five years national plan, energy consumption of the unit GDP and pollution would decrease 20% and 10% respectively compared with year 2005. Two important dispatch ideas along with the limitation of small units, and economic dispatch method: • Generation right trading • Energy saving dispatch method

  25. 3.1 Generation Right Trading • Small units (capacity less then 100MW) has reached 115 GW in China. The average coal consuming for 25MW units is more then 500-510g/kWh, but the average coal consuming of generator with the capacity more then 600MW is only 350 g/kWh. • Shunt down small units for energy saving and environment protection • The ongoing dispatch method is based on generation hours determined according different units. It may cause some problems. to solve the problem of un-economic results owing to generation bidding. • Generation right trading is to adjust the generation allocation among different units

  26. 3.2 Generation Right Trading Two ways for generation right trading • Small units negotiate with large units to transfer its generation rights based on the market rules. • Automatic generation right transfer, that is, in order to perform scheduled generation amount or contract quantity, when the market clearing price is lower than that of the contract, buy the generation from the market, it own units are shutdown, therefore the high efficiency units can generate more. The main features of generation right trade: • Generation resources configuration optimization • Promote the shunt down of the small units and proper compensation for the staff of small units • Energy saving and cost reduction. with the transfer of generation rights trade, the efficient thermal units and hydro units can gain more generation amount which is benefit for environment and utilize of renewable energy sources.

  27. 3.3 Energy saving dispatch method • Proposed in Aug.28, 2007. • Units are dispatched according to the priority within provincial system, and optimized within the regional system, and will be coordinated amount regional systems.  • The principle of the method: energy saving, environment protection and economic. According the determined priority, the units are dispatched. First for renewable energy, then synthesized energy utilization units, then the coal units based their cost and pollution level. Wind power, solar power, tide power, hydro power, biologic power and nuclear power are dispatched in high priority. • The thermal power units are dispatched according marginal cost of coal consumption. Parts of provincial system are selected for trial operation. will be promoted after the experiences are obtained.

  28. 3.4 Energy saving dispatch method • The priority of the generation for different units: • Wind power, solar power, tide power, hydro power, etc. the renewable units without adjust capability. • hydro power,biologic power and earth thermal, etc. the renewable units with the adjust capability and waste generation units satisfied environment requirements. • nuclear power • cogeneration units, generation according to thermal requirements for generation, and the units using the abundant thermal, gas, pressure synthesized utilization generation units. • nature gas and IGCC units • other thermal units, including cogeneration units without thermal load • Oil units • The same type units are ranked according to unit consumption of energy cost, the same level unit, the lower of the pollution, the higher of the priority • The generation price is not changed temporarily..

  29. 3.5 The meaning of the method Energy saving dispatch plus closed 50GW small units, it is expected that the saving of the coal for each year before 2010 is about 90M ton，the associated emission of SO2, CO2 and NOx can be reduced greatly. The generation hours for low efficiency and high pollution units should be reduced. Small units and oil units may face the difficulty to run for generation. The modern high efficiency large units may have higher utilization rate.

  30. Since energy resources are concentrated in the western part of China, and most industrial areas are located in the eastern part of China, huge blocks of power will be transmitted from the west to the east via long distance transmission corridors.

  31. Two important things may affect power system pattern and its perspective of power market: • By installing more generation and transmission lines and limiting of investment for energy intensive industries as well as by implementation of various demand elasticity measures, it is predicted that the energy shortage problems will be alleviated by 2006-2007 (rate of progress). • The construction of Ultra-high voltage transmission line and system (system management pattern).

  32. An example for market price

  33. The market price NC market: 2005.5 month competition, 27plant, bidding generation 3785 MWh for the generation of 1884MWh. The average 270.092 / MWh EC market: • Generation biding by units, 96 time periods, 10 section generation bidding for each time period. • Market clear price just higher than marginal cost of average cost of the generation untilitis. • Price for generation of 5 generation groups: 317.93 /MWh, Transmission and distribution 153.4/ MWh， 30.72% of sale price，the average sale price is 499.04/ MWh，uplift funds not included, average 27.83/ MWh）

  34. Contract price andcompetition price The market clearing price for competed generation may different from contract price, higher or lower. For example: in Longjiang system, the average power generation for competition is 3270MWh. Contract price RMB300.74/MWh, competed generation price is RMB111.5/Mwh. The price for generation in competitive market may higher than the times compared with the cases in normal system operation.

  35. Contract allocation method may affect competition results Allocate contract generation with the rate of load demand

  36. Contractallocation method may affect competition results Allocate contract generation by optimization 假定峰时竞价电价高于合同价

  37. Thank You Dr. Xiaomin Bai China Electric Power Research Institute bxm@epri.ac.cn

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