Recently, Sichuan Province issued the document “emergency notice on expanding the scope of power supply for industrial enterprises and the people”, requiring all power users to stop production for 6 days in the orderly power consumption scheme. As a result, a large number of listed companies were affected. With the issuance of several communiques, power rationing in Sichuan has become a hot topic.
According to the document jointly issued by the Department of economy and information technology of Sichuan Province and the State Grid Sichuan electric power company, the time of this power restriction is from 0:00 on August 15 to 24:00 on August 20, 2022. Subsequently, a number of listed companies issued relevant announcements, saying that they had received relevant government notices and would cooperate with the implementation.
According to the announcements of listed companies, the types of companies and industries involved in Sichuan’s current power limitation include silicon materials, chemical fertilizers, chemicals, batteries, etc. These are all high energy consuming enterprises, and these industries are the main force of price rise in the recent boom in bulk commodities. Now, the company has suffered a long-term shutdown, and its impact on the industry is indeed enough to attract the attention of all parties.
Sichuan is a major province in China’s photovoltaic industry. In addition to the local enterprise Tongwei, Jingke energy and GCL technology have set up production bases in Sichuan. It should be pointed out that the power consumption level of photovoltaic silicon material production and rod pulling link is high, and the power restriction has a great impact on these two links. This round of power restriction makes the market worry about whether the imbalance between supply and demand of the existing industrial chain will be further aggravated.
According to the data, the total effective capacity of metal silicon in Sichuan is 817000 tons, accounting for about 16% of the total national capacity. In July, the output of metal silicon in Sichuan was 65600 tons, accounting for 21% of the total national supply. At present, the price of silicon material has been at a high level. On August 10, the maximum price of single crystal re feeding has risen to 308000 yuan / ton.
In addition to silicon materials and other industries affected by the power restriction policy, electrolytic aluminum, lithium battery, fertilizer and other industries in Sichuan Province will also be affected.
As early as July, energy magazine learned that industrial and commercial enterprises in Chengdu and its surrounding areas suffered from power rationing. A person in charge of a manufacturing enterprise told the reporter of Energy Magazine: “we have to look forward to the uninterrupted power supply every day. The most frightening thing is that we are suddenly told that the power supply will be cut off immediately, and we have no time to prepare for the shutdown.”
Sichuan is a large hydropower province. Theoretically, it is in the wet season. Why is there a serious problem of power restriction in Sichuan?
The lack of water in the wet season is the main reason why Sichuan Province is forced to implement strict power restriction this year.
China’s hydropower has obvious characteristics of “abundant summer and dry winter”. Generally, the wet season in Sichuan is from June to October, and the dry season is from December to April.
However, the climate this summer is extremely abnormal.
From the perspective of water conservancy, this year’s drought is serious, seriously affecting the water volume of the Yangtze River Basin. Since the middle of June, the precipitation in the Yangtze River Basin has changed from more to less. Among them, the precipitation in late June is less than 20%, and that in July is less than 30%. In particular, the main stream of the lower reaches of the Yangtze River and the Poyang Lake water system are less than 50%, which is the lowest in the same period in the last 10 years.
In an interview, Zhang Jun, director of the hydrology bureau of the Yangtze River Commission and director of the water information and forecast center, said: at present, due to the lack of incoming water, the water storage capacity of most of the control reservoirs in the upper reaches of the Yangtze River is relatively small, and the water level of the main stream in the middle and lower reaches of the Yangtze River is also in a continuous decline trend, which is significantly lower than that in the same period in history. For example, the water level of the main stations such as Hankou and Datong is 5-6 meters lower. It is predicted that the precipitation in the Yangtze River Basin will still be less in the middle and late August, especially in the south of the middle and lower reaches of the Yangtze River.
On August 13, the water level at Hankou station of the Yangtze River in Wuhan was 17.55m, which directly fell to the lowest value in the same period since the hydrological records.
The dry climate not only leads to a sharp reduction in hydropower generation, but also directly increases the power load for cooling.
Since the beginning of summer, due to the extreme high temperature, the demand for air conditioning cooling power has surged. The sales of State Grid Sichuan electric power in July reached 29.087 billion kwh, an increase of 19.79% year-on-year, setting a new record for the sales of electricity in a single month.
From July 4 to 16, Sichuan experienced a long-term and large-scale high-temperature extreme weather rarely seen in history. The maximum load of Sichuan power grid reached 59.1 million kilowatts, an increase of 14% over last year. The average daily electricity consumption of residents reached 344 million kwh, an increase of 93.3% over the previous year.
On the one hand, the power supply is greatly reduced, and on the other hand, the power load continues to increase. The imbalance between power supply and demand continues to be misplaced and cannot be alleviated. Which eventually results in power limitation.
Deep reasons:
Contradiction of delivery and lack of regulation ability
However, Sichuan is also a traditional power transmission province. By June 2022, Sichuan power grid has accumulated 1.35 trillion kwh of electricity to East China, Northwest China, North China, central China, Chongqing and Tibet.
This is because the power supply in Sichuan Province is surplus in terms of power generation. In 2021, the power generation of Sichuan Province will be 432.95 billion kwh, while the power consumption of the whole society will only be 327.48 billion kwh. If it is not sent out, there will still be a waste of hydropower in Sichuan.
At present, the power transmission capacity of Sichuan Province has reached 30.6 million kilowatts, and there are “four direct and eight alternating” transmission channels.
However, the delivery of Sichuan Hydropower is not “I use it first, and then deliver it when I can’t use it”, but a similar principle of “pay as you go”. There is an agreement on “when to send and how much to send” in the provinces where the power is delivered.
Friends in Sichuan may feel “unfair”, but this reflects the importance of the contract. If there is no outward delivery, the hydropower construction in Sichuan Province will become uneconomic, and there will not be so many hydropower stations. This is the cost of development under the current system and mechanism.
However, even if there is no external transmission, there is still a seasonal shortage of power supply in Sichuan, a large hydropower province.
There are seasonal differences and lack of runoff regulation ability in hydropower in China. This means that the hydropower station can only rely on the amount of incoming water to generate electricity. Once the winter dry season comes, the power generation of the hydropower station will decrease sharply. Therefore, China’s hydropower has obvious characteristics of “abundant summer and dry winter”. Generally, the wet season in Sichuan is from June to October, and the dry season is from December to April.
During the wet season, the power generation is huge, and even the supply exceeds the demand, so there is “abandoned water”. In the dry season, the power generation is insufficient, which may lead to supply exceeding demand.
Of course, Sichuan Province also has certain seasonal regulation means, and now it is mainly thermal power regulation.
By October 2021, the installed power capacity of Sichuan Province exceeded 100 million kilowatts, including 85.9679 million kilowatts of hydropower and less than 20 million kilowatts of thermal power. According to the 14th five year plan of Sichuan energy, by 2025, the thermal power will be about 23 million kilowatts.
However, in July this year, the maximum power load of Sichuan power grid reached 59.1 million kilowatts. Obviously, if there is a serious problem that hydropower can not generate electricity in low water (even without considering the restriction of fuel), it is difficult to support the power load of Sichuan by thermal power alone.
Another regulation means is self regulation of hydropower. First of all, the hydropower station is also a reservoir with different reservoir capacities. Seasonal water regulation may be implemented to provide electricity during the dry season. However, the reservoirs of hydropower stations often have small storage capacity and poor regulation capacity. Therefore, the leading reservoir is needed.
The Longtou reservoir is built at the most upstream of the power station in the basin. The installed power generation capacity is small or not, but the storage capacity is huge. In this way, seasonal flow control can be realized.
According to the data of Sichuan provincial government, the installed capacity of reservoir power stations with seasonal and above regulation capacity is less than 40% of the total installed capacity of hydropower. If the serious shortage of power in this summer is an occasional factor, the shortage of power supply in the dry season in winter in Sichuan may be a normal situation.
How to avoid power limitation?
There are several levels of problems. First of all, the seasonal problem of hydropower needs to strengthen the construction of the leading reservoir and the construction of flexible power supply. Considering the future carbon constraints, building a thermal power station may not be a good idea.
Referring to the experience of Norway, a Nordic country, 90% of its power is supplied by hydropower, which not only ensures the safety and stability of domestic power, but also can output green power. The key to success lies in the reasonable construction of the power market and the full play of the regulation capacity of the reservoir itself.
If the seasonal problem can not be solved, from the perspective of pure market and economics, hydropower is different from flood and dry, so the electricity price should naturally change with the change of supply and demand. Will this weaken the attraction of Sichuan to high energy consuming enterprises?
Of course, this can not be generalized. Hydropower is a clean and renewable energy. Not only the electricity price but also its green value should be considered. Moreover, the problem of high water and low water of hydropower may be improved after the construction of Longtou reservoir. Even if the market transaction leads to the fluctuation of electricity price, there will not be a large difference frequently.
Can we revise the rules of Sichuan’s external power transmission? Under the restriction of the “take or pay” rule, if the power supply enters a loose period, even if the power receiving party does not need so much external power, it will have to absorb it, and the loss will be the interests of the power generation enterprises in the province.
Therefore, there has never been a perfect rule, only to be as fair as possible. Under the situation that the actual “national one grid” is temporarily difficult to realize, due to the relatively fair full power market and the scarcity of green power resources, it may be necessary to first consider the market boundary of the sending end provinces, and then the receiving end market subjects directly deal with the sending end market subjects. In this way, it is possible to meet the requirements of “no power shortage in the provinces at the power transmission end” and “power purchase on demand in the provinces at the power reception end”
In the case of serious imbalance between power supply and demand, planned power restriction is undoubtedly better than sudden power restriction, which avoids larger economic losses. Power limitation is not an end, but a means to prevent larger scale power grid accidents.
In the past two years, “power rationing” has suddenly appeared more and more in our vision. This shows that the dividend period of the rapid development of the power industry has passed. Under the influence of a series of factors, we may have to face an increasingly complex problem of power supply and demand balance.
Facing the causes bravely and solving the problems through reform, technological innovation and other means are the most correct choice to “completely eliminate power limitation” again
Post time: Aug-17-2022
