In the 14th Five-Year Plan for Scientific and Technological Innovation in the Energy Sector issued by the National Energy Administration and the Ministry of Science and Technology in 2021, the new power system and its supporting technologies are listed as one of the key tasks. Under the guidance of low-carbon and zero-carbon technologies in the new power system, the installed capacity and power generation of fossil fuels will gradually decline, and the total carbon emissions of the power system will drop to the net-zero level. From the perspective of the proportion of carbon emissions and the potential for emission reduction, the low-carbon transformation of coal-fired power is a key point for China to strive to achieve carbon neutrality by 2060.
Breaking the Dilemma of Coal Power Knowing the position of coal powerWith the implementation of energy transition, supply-side structural reforms, and increasingly tighter environmental constraints, how can coal-fired power, as the power supply side, adapt to the consumer-side reform? In the "14th Five-Year Plan" and for a longer period of time in the future? Should development be put on hold or not again to make room for renewables? Or will it develop moderately and take on the task of providing regulatory capacity for renewable energy and new power systems? "Low-carbon transformation" breaks the dilemma of coal powerThe problem of coal power is timely. With the rapid development of new energy and significant enhancement of competitiveness, it can compete with coal power and achieve grid parity. Photovoltaic is known as the "king of electricity", and "a dime and one kilowatt-hour of electricity" is no longer a castle in the air; Wind power has shown a trend of large-scale development and base construction, both onshore and offshore; Energy storage is considered to be the "rigid need" of the future energy revolution; Hydrogen has been called the "ultimate energy source of the 21st century", and clean alternatives to electricity are unstoppable. Coal power will be "diluted, squeezed and replaced" by clean energy year by year, and its investment, installed capacity and electricity proportion continue to decline. With the constraints of carbon emission quotas and the increase in carbon emission costs, coal-fired power companies will inevitably increase their operating costs (carbon costs, technical costs, and management costs). Coal-fired power will face the intertwined impact of the complex and volatile coal market, power market, ancillary services market, capital market, and carbon market. Technology can be used to reduce carbon emissions. At this stage, the "gradual decarbonization" of coal-fired power is the focus and direction of efforts to get rid of difficulties. Based on the basic national conditions of coal-based, "achieving self-carbon reduction with high efficiency" and "achieving structural carbon reduction with flexibility" are the two major goals of coal-fired power. The 14th Five-Year Plan for Scientific and Technological Innovation in the Energy Sector aims to further promote the clean, low-carbon, safe and efficient development of the coal-fired power industry, focusing on clean and efficient coal conversion technologies and advanced coal-fired power generation technologies. The "clean and low-carbon" approach of coal-fired power includes three ideas: first, to reduce coal consumption in an efficient way to reduce emissions; The second is to take a systematic approach to carbon reduction at the end by adopting CCS or CCUS technology; The third is to increase the use of renewable energy and reduce the time of thermal power generation through flexible ways to promote energy storage technology and frequency and peak regulation technology, so as to achieve technological carbon reduction. Deep peak shaving is still feasible. The new power system will realize the transformation from high-carbon fossil energy to green and low-carbon renewable energy, and the most important measure is to develop new energy. However, due to the randomness, interstitiality, volatility and non-adjustment characteristics of new energy power generation, coal power peak regulation is required to stabilize fluctuations. At the same time, by controlling the main costs of coal-fired power units in the operation of deep peak regulation (safety risk cost, life loss cost and coal consumption increase cost, etc.), the "deep regulation subsidy" has truly become a new way for coal-fired power to make profits. If the gap between the incremental cost of coal-fired power and the subsidy for deep regulation is small, on the premise of ensuring safety, environmental protection and low increase in energy consumption, the deep regulation capacity of coal-fired power units should be greatly expanded, and the economy and flexibility of the units under low load should be improved, so as to achieve deep peak regulation and structural carbon reduction. "Safety and supply" is the position of coal power
From the perspective of security and supply, coal power is a strong guarantee for the safety of the energy system and a strong support for the safety of the power system. With the continuous advancement of the transformation of the energy system and the innovative application of new energy power generation technology, the transformation of the new power system is accelerating. However, the volatility of renewable energy brings about the instability of electricity, the mismatch between wind and solar power generation and the peak and valley of power consumption of the power grid, and is subject to natural factors such as weather and terrain, which cannot meet the increase in electricity and heat demand. Compared with other power generation methods, coal-fired power has the advantages of short construction period, flexible site selection, and few limited factors for unit power generation, which determines that the status of coal-fired power basic power supply is difficult to replace. At the same time, coal-fired power generation is more flexible and can meet the needs of dispatching and regulation at any time, which is the most economical and fastest way to regulate the peak of the power grid at present and for a long time to come. The urgent need to relieve the burning of "coal" Expand the road of coal powerCoal power cannot be stopped "one size fits all", and it still needs to be "burned". Whether it is to guarantee the bottom line or support the incremental development of new energy, coal power is inseparable in the short term. Attitudes towards coal power at the national level have also become clearer. **The Action Plan for Peaking Carbon Emissions before 2030 issued by China specifies the development orientation of coal-fired power in the "dual carbon" goal: that is, to promote the transformation of coal-fired power to a basic guarantee and system-regulated power supply. The "2023 Energy Work Guidance" issued by the National Energy Administration pointed out that "accelerate the construction of qualified supporting regulatory power sources, and start production of a number of coal-fired power projects". Supportiveness, regulation, and reliability are becoming the "new labels" of coal power. When the installed capacity of coal-fired power should peak and when the coal-fired power industry can achieve carbon peaking, it is necessary to actively and prudently design the low-carbon transformation path of coal-fired power to ensure that coal-fired power can develop moderately in the market environment. Step by step, moderate developmentUnder the new power system, coal-fired power should follow the laws of the market and power operation, deepen supply-side reform, take the initiative to reduce ineffective supply, vigorously improve energy efficiency, and strive to rebalance the supply and demand of the power market, so as to promote the clean and efficient use and high-quality development of coal-fired power. Restructuring, transformation, optimization and upgrading of existing coal-fired power plants. The existing coal-fired power should fully consider the actual situation of the existing units, such as the operating status, life expectancy, and carbon emissions, and first eliminate and shut down, reorganize and integrate, and then implement upgrading and transformation by category, so as to achieve "low energy consumption, low emissions, and high energy efficiency", and improve the "three capabilities" of comprehensive energy, power auxiliary services, and market competition. The first is to make a comprehensive assessment of coal-fired power enterprises in areas that meet the needs of electricity and heat, and implement "active shutdown" to avoid the "popsicle effect" for some old and inefficient coal-fired units that are over-aged, have no hope of turning around, do not meet energy consumption, environmental protection and safety standards, and are unable to invest in transformation, or illegal units that have not been approved and have incomplete licenses. In particular, for coal-fired power units below 300,000 kilowatts that do not meet the requirements, we will continue to implement the policy of eliminating backward production capacity and implement "forced shutdown". Second, through capital operation means such as asset transfer, coal-fired power restructuring, and regional integration, we will reduce homogeneous competition, reduce coal-fired power capacity, promote overall loss reduction, reduce debt, and alleviate operational difficulties. The third is to focus on old and small units and subcritical units, and implement optimization and upgrading such as ultra-low emission transformation, flexibility transformation, energy conservation and carbon reduction transformation, and multi-energy combined generation transformation. Coal-fired power units actively participate in peak regulation services, and make up for the shortcomings of the serious lack of power grid regulation capacity by strengthening planning guidance and improving the compensation policy for auxiliary services. Incremental coal-fired power is strictly controlled, managed, and innovated and developed. During the 14th Five-Year Plan period, the new scale of coal-fired power should be comprehensively assessed, reasonably determined, and strictly controlled, and the bottom line is to ensure energy consumption and take into account the peak of electricity carbon emissions. Learn from the development experience accumulated by coal power over the years, such as the construction of Kangkou intersection power plant and transmission port power plant, the development of coal-power integration and Hong Kong-electricity integration projects, and promote the integration of industry and finance, road and port support; Efforts will be made to increase the proportion of clean and efficient coal-fired power units with large capacity, high parameters, and low pollution, explore the coupling power generation of "coal power + energy storage" and "coal power + biomass", deeply expand the regulation capacity of coal power, and further help decarbonize coal power through CCUS, biomass co-combustion, coal-ammonia co-combustion and other technologies. Adapt measures to local conditions and implement policies by categoryComprehensively coordinate the regional and technical differences of coal power, scientifically and rationally plan coal power transformation actions, and implement flexible policies and multi-pronged measures。 First, the scale of coal-fired power, the structure of the unit, the service life and other levels are uneven, combined with the characteristics of coal-fired power in different regions and the balance of power supply and demand, the transition path of coal-fired power is determined according to local conditions. Shandong, Inner Mongolia and Shanxi, among other major coal-fired power provinces, have large installed capacity and a high proportion of small units, so priority can be given to upgrading and eliminating some coal-fired power units that have been in operation for a long time, with low efficiency and poor profitability. Coal-fired power units in provinces covered by the East China and China Southern Power Grids, such as Guangdong, Jiangsu and Zhejiang, are larger and more technologically advanced, and can give full play to the advantages of short operating life and closer to load, carry out flexible transformation, coupling coal-fired power with nuclear power, offshore wind power, distributed photovoltaic and other power generation technologies, and prepare for long-term transformation into near-zero carbon units. Second, from a technical point of view, under the condition of ensuring the safety of heating and power supply, priority can be given to the early retirement strategy for units with low energy efficiency such as CFB and subcritical units below 200 MW; Actively promote coal-fired power units below 600 MW to adopt the measures of "three reforms linkage", especially increase the flexibility transformation of units and heating transformation, change to peak power supply, and appropriately extend the life of the transformed units; From a medium and long-term perspective, IGCC, supercritical, ultra-supercritical and other high-tech parameter units will be gradually promoted after the CCUS transformation, and the technical life can be appropriately extended. Energy is integrated and multi-energy complementarySome coal-fired power enterprises can give full play to the advantages of adjacent industrial parks, rely on the energy needs of enterprises in the park, implement comprehensive energy multi-generation projects, develop comprehensive energy demonstration projects, and break through the problems of single industrial chain and insufficient extension. Promote the new model of "coal power +" comprehensive energy services, build "polygeneration flexible power plants" and "park power plants", expand the diversified development of electricity, heating, cooling, gas and water, comprehensive utilization of solid waste, thermal storage frequency modulation, microgrids, etc., and accelerate the transformation of coal-fired power enterprises into comprehensive energy enterprises. As the revenue of integrated energy-related businesses continues to increase, coal-fired power operations will no longer be subject to high coal prices and low electricity prices. In the process of coal-fired power transformation, the power supply side will be shifted from coal-fired power generation to solar energy, wind energy and other new energy power generation, accelerate the development and utilization of renewable energy, enhance the capacity of renewable energy consumption, and promote multi-energy complementarity such as wind and solar complementarity, water and fire. Financial support, risk managementIn order to support the smooth and orderly transformation of coal-fired power, banks and other institutions can be guided to give reasonable special financial support for the transformation and upgrading of coal-fired power. Transition finance support should be matched with the goals and paths of coal-fired power transition, meet the requirements of the scale and form of funds in different periods, achieve a combination of long-term and short-term and a combination of multiple financial instruments, and improve flexibility, pertinence and adaptability. In the short term, we will focus on supporting the "three reforms" of coal-fired power through debt-based financing methods such as transition credit and transition bonds, and explore debt-to-equity swaps in the medium and long term, so as to support enterprises to promote transformation in a longer period of time. Explore and carry out transformation, mergers and acquisitions, mezzanine and other forms related to equity investment, and encourage investment institutions to participate in the transformation investment of coal power enterprises。 Financial support should also provide insurance services and risk asset management services through financial instruments such as trusts, develop transformation-related insurance products, and solve the problems faced by coal-fired power enterprises such as long R&D cycles, market uncertainty, and high risk of stranded assets. Market-driven, policy supportIn order to improve the robustness of the low-carbon transformation of coal-fired power enterprises and give full play to the decisive role of the market in resource allocation, it is necessary to further improve the supporting mechanisms and market models that match the functional positioning of coal-fired power and conform to the characteristics of the new power system. Deepen the reform of the electricity market. further improve the market-oriented power balance mechanism, auxiliary service market mechanism and power dispatching trading mechanism; Improve the time-of-use electricity price policy, reasonably determine the peak-to-valley and seasonal electricity price differences, and establish a peak electricity price mechanism。 We will build "medium and long-term + spot + ancillary services", promote the standardized trading model of electricity, and carry out the construction of capacity market and transmission right market in an orderly manner. At the same time, the subsidy policy for coal and biomass co-burning power generation will be increased; increase the electricity compensation and economic compensation policies for coal-fired power shutdown enterprises; Improve carbon trading policies. Play a role in cost facilitation. Encourage coal-fired power units to carry out flexible transformation, and improve the ancillary service market and compensation methods for coal-fired power units participating in peak regulation, voltage regulation, standby, and black start; Establish market operation rules for power grid peak regulation auxiliary services, and according to the principle of "who benefits, who pays", new energy power plants and coal-fired power plants whose output has not been reduced to the paid peak regulation benchmark will share the peak regulation cost pressure for the retrofitted units. Favorable policies help development. The "2023 National Economic and Social Development Plan" issued by the state pointed out that "strengthen the construction of various power sources, especially reliable power sources such as coal power, and further promote the joint operation of coal and coal power, coal power and renewable energy". Coal-to-power pools can be backed by large coal groups to mitigate the risks of coal price fluctuations. Many new coal-fired power projects are in the form of coal-power pools, and large coal groups are becoming group companies investing in coal-fired power projects. Coal-fired power and renewable energy pools. Most renewable energy companies have stable profits, becoming the main profit leader of many coal power companies, and investing in more wind and solar projects can not only greatly improve the operating performance of coal power companies, but also meet the requirements of the national energy transition. In order to encourage the development of new energy in coal-fired power, it is recommended to reward coal-fired power enterprises that carry out flexible transformation with new energy construction indicators.
This article is an exclusive manuscript of "China Electric Power Enterprise Management", written by Yuan Hong, Guoneng Guohua (Beijing) Distributed Energy Technology Co., Ltd.