Recently, the National Development and Reform Commission and the National Energy Administration officially approved the "Inter-provincial Power Spot Trading Rules (Trial)", and the State Grid Corporation of China plans to launch pilot transactions in the near future. So, what exactly is electricity market trading, and why do you want to engage in spot electricity trading?

First of all, electricity is a kind of energy and also a kind of commodity. Since it is a commodity, it can naturally be traded freely in the market. However, compared with ordinary commodities, electricity is different in at least five aspects: it is invisible, intangible, and cannot be stored in large quantities. Production and consumption are completed at the same time. The center executes the transaction results. Therefore, the trading method of electricity is slightly different from that of general commodities.

Who are the members of this market?

What are you selling?

Since it is a market, there must be commodities. For example, there are vegetables and fruits in the farmers market, and clothes, shoes and so on in the clothing market. The electricity trading market is no exception. Generally, there are commodities such as electric energy, generation capacity, electric auxiliary services, and transmission rights.

Who will buy and sell?

A transaction requires a buyer and a seller. Generally speaking, according to the volume of commodity transactions, the market can be divided into wholesale market and retail market. In the electricity wholesale market, the seller is the power generation company, and the buyer is the electricity retailer and large power user. In the electricity retail market, the seller is an electricity retailer, and the buyer is a small and medium-sized end user.

Who will organize the transaction?

Buying and selling general goods in the market, buyers and sellers only need to face to face, and the delivery can be completed quickly. In the electricity market, due to the particularity of its commodities, specialized market operation agencies are required, mainly including dispatching agencies and trading agencies.

In this market, how are commodities classified?

Since the production, circulation, and consumption of electricity commodities are almost instantaneous and cannot be stored in large quantities, the supply and demand of electricity must maintain a real-time balance. In order to ensure the safety of power supply, precise control by dispatching agencies is required. Therefore, in electricity market transactions, according to the length of time buyers place orders in advance, it can be divided into medium and long-term markets and spot markets.

No stock, no market, no mid-to-long term, and no market

Medium and long-term electricity transactions refer to wholesale electricity transactions carried out by market entities for many years, years, seasons, months, weeks, and days. Spot transactions mainly carry out day-ahead, intraday, and real-time energy transactions.

In a stable and healthy electricity market, the medium and long-term trading of electric energy is an indispensable and important link. The operation practice of mature foreign electricity markets shows that the contracted electricity of users in the medium and long-term trading of electricity accounts for the vast majority.

In order to facilitate everyone's understanding, let's give an example.

Xiao Wang's restaurant business is booming, and the main dish is pickled fish, so he signed a one-year supply contract with the fish pond owner. The owner of the fish pond sends 50 catties of fish to the store every day, at 6 yuan per catty. This is medium and long-term trading.

In this transaction, Xiao Wang does not have to worry about going to the vegetable market every day, which saves time and effort. The owner of the fish pond has locked the buyer in advance.

It coincided with the National Day holiday, and the restaurant was extremely popular, requiring 60 catties of fish, and the fish sent by the fish pond owner could not meet the demand. In desperation, Xiao Wang had no choice but to go to the vegetable market to temporarily buy a few fish as an emergency. This is spot trading.

The same is true for electricity markets. Users can adjust their purchasing strategies according to the actual situation. If the power contracted in the medium and long-term market cannot be met, it is necessary to supplement the actual power demand through the spot market. If there is surplus electricity in the medium and long-term market, it can be sold through the spot market.

The story of Xiaowang Restaurant continues. A year later, because of the high quality and low price of the dishes, Xiao Wang expanded 9 branches and needed an average of 500 catties of fish every day. In order to control the company's operational risks, Xiao Wang will still choose to sign a long-term cooperation agreement with the fish pond owner in advance, and agree on the quantity of fish to be sent on weekdays, weekends, and holidays, making the contract more refined. If the demand for fish temporarily deviates, go to the vegetable market to replenish.

In fact, it is not difficult to understand. If a user has a large demand, he cannot rashly choose to go to the vegetable market to purchase every day. The price fluctuates every day, and the user risk is too great. Therefore, we often say that medium and long-term electricity transactions are "stabilizers" and "ballast stones".

How "now" is the spot? 15 minutes

Electricity commodities, like general commodities, will have different price costs at different times and in different geographical locations.

Due to the short interval between transaction and delivery in the electricity spot market, the price will fluctuate over time. Therefore, in the electricity spot market under pilot construction in my country, the day-ahead electricity market takes 15 minutes as a trading session, with 96 sessions per day; each trading session in the intraday market is 15 to 60 minutes; Power trading shall prevail. The node electricity price is adopted on the power generation side, and the uniform weighted average electricity price is adopted on the user side, which is jointly cleared through the electric energy market and the auxiliary service market.

Therefore, in the electricity market, the medium and long-term electricity transaction price is based on the spot market electricity price. Through the evaluation of the spot price over the years and the prediction of factors that may affect costs in the future, the two parties negotiate an acceptable price.

How do buyers and sellers trade in this market?

Like many commodities, the electricity market can be divided into two categories: wholesale and retail.

In the wholesale market, electricity market transactions include bilateral negotiation transactions, centralized bidding transactions, and listed transactions.

Also take the sale of fish as an example.

Bilateral negotiated transaction

If you need to wholesale a large amount of fish, you can go directly to the fish pond owner, discuss the quantity and price of the fish face to face, and then sign a contract to finalize the agreement. This is a bilaterally negotiated transaction. The buyer and the seller determine the electricity quantity and electricity price through negotiation and negotiation, and then register the contract information in the trading center. This method is flexible and simple, and usually the purchase volume is relatively large.

Centralized bidding transaction

On the trading platform, both the fish buyer and the fish seller submit quotations separately, and the trading platform matches the transaction according to market rules. This is a centralized bidding transaction.

listing

Buyers and sellers, one publishes fish selling information on the trading platform, and the other places an order for a transaction, similar to a certain treasure or a certain east, which can be bought and sold at any time. This is a listed transaction.

In the retail market, there are fixed return models, market linkage models, fixed return + market linkage models, and fixed price models.

Still take buying fish as an example.

fixed return model

If you go to the retail market to buy fish, one way is for the merchant to purchase from the wholesale market. Regardless of whether the purchase price is high or low, they will sell it to us at an additional price of 50 cents (a fixed price difference). The selling price of the fish will fluctuate with the purchase price of the merchant. This is the fixed return model.

Market linkage mode

We can also negotiate with the merchant and ask him to buy fish for us. If the negotiated fish price is cheaper than the market price, we will discuss with the merchant to share the cheaper part. This is the market linkage model.

Buying electricity in this market sometimes requires an agent?

Since there is an electricity market, can everyone go to the electricity market to buy electricity? In principle, the state encourages users and power generation companies to directly sign contracts and all enter the electricity market. However, the reform of electricity marketization is a gradual process that needs to be promoted steadily.

In order to ensure the safe supply of electricity and accelerate the reform of electricity marketization, the National Development and Reform Commission has studied and issued documents to further deepen the formation mechanism of coal-fired power grid electricity price marketization. Users fully enter the market.

This wave of operations has enabled buyers, sellers, and commodities in the market to have trading conditions. But actually implementing it is not that simple.

Take buying fish as an example. Some people eat fish every day, but never buy fish. Some people like to eat fish, but they can only eat half of it at a time, which is not easy to buy. There are also some people who have always wanted to buy it, but they don't know how to buy it, where it is fresh, where the price is cheap, and what variety has a good taste. What to do at this time, find someone to buy it for you! So who should I buy it for? Of course, it is best to find a buyer who can pick fish, negotiate prices, and provide good service.

The same goes for the electricity market. There are nearly 50 million industrial and commercial users in my country, and it is difficult to operate all of them in one go. Therefore, in order to ensure the smooth implementation of the electricity price reform policy, the National Development and Reform Commission has researched and formulated the agency purchase mechanism of power grid enterprises. When users have the ability to enter the market independently, they can choose to enter the market.

In this way, it will not affect the user's electricity consumption method, and ensure that the power grid company purchases electricity on behalf of the grid company when it is unable to enter the market unconditionally, and the user can feel the market price fluctuation signal in real time through the grid company, and adjust the power consumption behavior reasonably.

At this stage, the state has clarified the scope of power purchase users and the formation method of user electricity prices.