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Coal prices soaring electricity prices to profit plummeted trigger price increases very little possibility of linkage mechanism



The rapid rise in coal prices has led to a sharp decline in profits for power generation enterprises, and the contradiction between coal and electricity has been highlighted again.
Recently, according to China business newspaper, Huaneng, Huadian, Datang and Guodian, the four largest electric power central enterprises, submitted a report to the Shaanxi provincial government on the basis of the cost of electricity coal exceeding the cost of enterprises, hoping that the government would raise the electricity price.
Since 2016, the strict implementation of China's production capacity policy has led to the decline in the coal market for the first two years, and the price of coal began to recover in the first half of this year. The performance of coal and electricity enterprises, as the downstream users, began to turn on the inflexion because of the shortage of market demand and the rise of fuel cost.
In November 22nd, Chinese Electricity Council planning department deputy director Zhang Lin, experts in the "13th Five-Year" power development opportunities and challenges forum said that from the beginning of September this year, the five major power groups from positive to negative profits in the coal sector, compared to the same period last year profit of 6 billion 400 million yuan, has turned into a loss of 300 million yuan; in October, five power generation group coal sector losses has been further expanded to 2 billion 600 million yuan. According to the data given by Professor Yuan Jiahai of North China Electric Power University, in the second half of this year, with the increase of coal prices, the production cost of coal and electricity enterprises has increased by 0.04 yuan, -0.06 yuan / kWh.
In order to suppress the rapid rise of coal prices, the NDRC has held several meetings in the last two months for the situation of coal supply and demand, and has also issued a number of policies. One of them is to require the relevant regions, departments and enterprises to further accelerate the signing of medium and long term contracts and establish a long-term mechanism for the smooth development of the coal industry. As of November 30th, the price of thermal coal in the new Bohai rim was closed at 599 yuan / ton, which was 2 yuan / ton lower than the downlink. It has been down for four consecutive periods and has fallen below 600 yuan / ton mark.
In spite of the regulation of the national development and Reform Commission, the price of coal has gone down, but the electricity companies that have been squeezed by the profits still require the government to raise the price of electricity. Guotai Junan analyst Wang Wei told the "Securities Daily" said, according to the China coal linkage mechanism of related policies, in reference to the 2016 October average price of thermal coal, estimation of thermal power tariff of about 0.016 yuan / kWh increase, if coal prices continue to rise in the fourth quarter, the annual cycle, the tariff is about room 0.03 yuan / kwh.
"From the current development and Reform Commission to stabilize the price of coal, to promote the coal industry to enter the" long association time "approach, the possibility of electricity price increases in this year is very small. Commodity information service provider Acciona think the coal analyst Deng Shun on the interface of news reporters that when coal prices remain high, to solve the problem of the loss of power can be improved by the method of reducing the price of coal or electricity.
Xing Lei, director of the research center of China Coal Economics Research Institute, Central University of Finance and Economics, also believes that when China's real economy is facing difficulties, a large number of industrial enterprises still need to operate at low cost. The way to raise the electricity price is very difficult.
Coal and electricity linkage mechanism is put forward and perfected under the constantly changing market environment of China's coal and electric power enterprises.
Before 2003, the power enterprise's strong position pressed coal enterprises. In order to straighten out the price relationship between coal and electricity and alleviate the contradiction between coal and electricity in China, China launched the coal electricity linkage mechanism at the end of 2004, which required 6 months as a cycle and adjusted the electricity price when the average coal price fluctuated more than 5%.
In -2012 in 2003, the coal industry experienced "ten years of gold", the price of coal is at a high level and the seller's market is more dominant. According to the situation at the end of 2012, the national development and Reform Commission issued the guidance on deepening the marketization reform of electric coal, and put forward the improvement mechanism of coal electricity linkage. The coal linkage for the annual adjustment period, the proportion of coal price fluctuation of electricity prices to consumption from 30% to 10%.
After 2013, the coal market began to oversupply, the price of coal fell, and the profit of the electric power enterprises improved. At the end of 2015, the NDRC issued the notice on improving the linkage mechanism of coal and electricity price. It stipulates that when 2014 is the base year, the electricity price will fluctuate at 30 yuan / ton in the annual cycle, and the trigger formula will be calculated. When the coal price fluctuation does not exceed 30 yuan / ton, the cost of power generation enterprises to change from consumptive, do not start the linkage mechanism; fluctuations in coal prices more than 150 yuan / ton is no longer part of the linkage.
Up to now, in addition to the adjustment of several electricity prices affected by environmental or renewable resources tax, the electricity price adjustment is four times because of the mechanism of triggering coal and electricity linkage. In May 2004, June 2005, April 2015 and January 2016, respectively.
The last two prices of industrial and commercial electricity and general industrial and commercial sales were downgraded to 0.018 yuan / kWh and 0.03 yuan / kWh, respectively.
According to the data released by the national development and Reform Commission, the national electricity coal price index was only 326.67 yuan per ton in January this year. "Although the national electricity coal price index rose to 469.01 yuan / tonne in October this year, the average price index of the year will be lowered by the data of the beginning of the year." "Even if coal prices continue to rise in November and December, the national coal price index of 2016 will not trigger a coal - electricity linkage mechanism," Deng Shun said.
China Merchants Securities also in the "coal industry supply side reform report" analysis, to trigger the coal linkage, in 2016 the annual average coal price index to 444.44 yuan / ton in 2014 and the benchmark is more than 30 yuan, the annual average price of 474.44 yuan / ton, due to the coal electricity linkage mechanism and trigger price increases.
In addition, Xing Lei believes that the coal price Association, which is fully promoted by the development and Reform Commission, is in the short term.