Author: Lin Chunting
Over the years, as a veteran of the power industry, Zhang Chuanming has witnessed the departure of his former colleagues one by one, and also witnessed the changes in this industry time after time.
Today, he is once again witnessing changes—the electricity sales market, which is not well known to the outside world, is undergoing a new round of reshuffle.
The electricity sales market is the product of China's second power system reform (hereinafter referred to as "electricity reform") launched in 2015.
From 2016 to 2017, the socialized electricity sales market was on the rise, and a large number of industry elites like Zhang Chuanming rushed into this field with capital.
But the good times didn't last long. With the market changes, many domestic electricity sales companies suffered losses or even went bankrupt.
In the next few years, batch after batch of electricity sales companies actively or passively left the market.
In 2018, there were more than 10,000 electricity sales companies registered across the country, but by 2021, the number will be reduced to about 5,000.
On November 25, 2022, the National Energy Administration issued the "Basic Rules for the Electricity Spot Market (Draft for Comments)" and "Measures for the Supervision of the Electricity Spot Market (Draft for Comments)" to further regulate the operation and management of the electricity spot market.
Among them, the "Basic Rules for the Electric Power Spot Market (Draft for Comment)" clearly states that "the exit conditions of electricity sales companies shall be implemented in accordance with the state's management regulations on the access and exit of electricity sales companies."
From the perspective of the industry, these two "Drafts for Solicitation of Comments" mean that a new round of changes is coming.
A number of socialized electricity sales companies are withdrawing.
Since the beginning of this year, hundreds of electricity sales companies in China have been forced to withdraw, and a large number of electricity sales companies have been suspended, restricted and other measures.
However, Zhang Chuanming chose to stick to it.
His reason is, "The market is big enough, and I still think it can be done today."
fiery
Zhang Chuanming, 52 years old this year, has worked for China Southern Power Grid headquartered in Guangzhou for 23 years.
Thirteen years later, on March 15, 2015, the State Council issued "Several Opinions on Further Deepening the Reform of the Electric Power System" (hereinafter referred to as "Document No. 9"), kicking off a new round of electric power reform.
The core of this round of electricity reform is to "control the middle and let go of the two ends", and "orderly open the power distribution and sales business to social capital" on the electricity sales side.
This is the first time that China has opened up the electricity sales business to social capital. The purpose is to increase the power users' right to choose by introducing competition, and thus give birth to a trillion-dollar electricity trading market.
Previously, power users mainly bought electricity from grid companies, but after the release of electricity sales, users can directly buy electricity through electricity sales companies.
In other words, after the electricity reform, electricity sales companies can become "middlemen" by buying electricity from power plants (power generation companies) and then selling them to electricity users.
As a major province in terms of economy and electricity consumption, Guangdong has launched the first round of electricity sales reform in the country, becoming the first province in China to allow electricity sales companies to participate in competitive transactions.
In the three monthly electricity centralized transactions from March to May 2016, the electricity sales companies introduced in Guangdong Province to participate in the bidding accounted for 70% of the total transaction volume.
In 2016, Zhang Chuanming decided to leave the system and join a private enterprise, becoming a member of the electricity sales market, and founded his own company a year later.
"After reading Document No. 9, I felt that this was the '1978' of the power industry." Zhang Chuanming, who is now the chairman of Kyushu Energy Co., Ltd. (hereinafter referred to as "Kyushu Energy"), recalled to a reporter from China Business News , "Electrical reform will create many new opportunities and business formats."
At that time, there were a group of people like Zhang Chuanming, the "Prophet of Spring River Plumbing Ducks", who had a premonition of the upcoming changes in the power industry.
According to Zhang Chuanming's estimation, from 2015 to 2017, only about 20 cadres above the department level resigned from China Southern Power Grid and entered the field of electricity sales, and two of them were department-level cadres.
The market that was first opened up is booming.
According to Zhang Chuanming's recollection, when the market was good, he could earn hundreds of thousands of yuan in half a day just by training people.
The basic profit model of electricity sales companies is to earn the price difference. The market transaction price of electricity fluctuates according to the benchmark price, and the benchmark price and the floating range are stipulated by the government.
If power users do not participate in market transactions, they will be supplied by the grid at the benchmark price.
But in the initial stage of the market, the market price is far lower than the benchmark price.
In the three transactions from March to May in Guangdong Province in 2016, about 10% of the electricity had three monthly biddings. Monthly accumulative profits exceeded 500 million yuan.
However, the price that the electricity sales company sells to users has only dropped by 0.01 yuan/kWh, and the difference in the middle price has all fallen into the pockets of the electricity sales company.
"We made a profit of more than 10 million yuan in the first transaction." The main person in charge of an electricity sales company under a certain electric power central enterprise told the first financial reporter at the time, "This far exceeded our expectations."
According to the 2016 mid-year report data of Guangdong Electric Power A (000539.SH), the company’s established electricity sales company achieved a profit of 95 million yuan in market transactions.
At that time, the key word used by the outside world to describe electricity sales companies was huge profits, while the entire market could be described as “hot”.
In January 2017, Zhang Chuanming crowdfunded nearly 200 million yuan in capital and registered Kyushu Energy in Guangzhou.
In the first test of the electricity sales market, he made a "big million" investment with "a few million small".
At the same time, Zhang Chuanming also held training on electricity sales business in the company's conference hall.
"Teaching for half a day, regardless of everything else, the tuition fee per person is 3,999 yuan, and there are hundreds of people a day at the peak." Zhang Chuanming made at least 400,000 yuan in half a day of lectures, which shows how hot the market was at that time.
fall
During the training, Zhang Chuanming found that those who came from all over the world to listen to him talk about the electricity sales business were full of enthusiasm and impulsiveness.
After the release of Document No. 9, institutions, industries, and brokerages have repeatedly repeated the views that "the new electricity reform is expected to open up a trillion-dollar market, and the liberalization of the electricity sales side may become the biggest dividend of this round of reform."
Indeed, judging from the electricity consumption data of the whole society released by the National Energy Administration in 2015, the electricity consumption of the whole society in 2015 was 5.55 trillion kwh, and the average sales price of power grid enterprises in that year was 0.64333 yuan/kwh, which is equivalent to more than 3 trillion yuan. The electricity sales market is released.
The cake is so big, and the first batch of electricity sales companies that tested the water have made a lot of money, and electricity sales companies have begun to bloom all over the country.
In addition to traditional power companies, many capitals that have nothing to do with power have also flocked here.
In 2016, there were less than 300 electricity sales companies announced by the power trading center, but more than 3,000 companies registered with the industry and commerce.
By 2018, this scale will exceed tens of thousands.
At the beginning of the electricity reform, the policy stipulated the qualifications for the establishment of electricity sales companies: "Grid companies, power generation companies and other social capitals can invest in the establishment of electricity sales companies. Users with distributed power supply, water supply, gas supply, heat supply and other public The service industry, energy-saving service companies, etc. can engage in market-oriented electricity sales business. Individuals can also invest in the establishment of electricity sales companies, as long as they meet the access conditions for electricity sales companies.”
In terms of the access mechanism, the policy clarifies that the access method of replacing administrative licensing with registration and identification is to reduce administrative costs, achieve effective supervision, and improve work efficiency.
"At that time, there was almost zero threshold for entering the field of electricity sales." An industry insider used his own case as an example to the reporter of China Business News, "It only took one working day from submitting the registration materials at the window to receiving the business license."
According to Zhang Chuanming, it was not difficult to obtain the qualification to sell electricity at that time. "Registered capital, professional staff, fixed office space, etc., can be done by someone for tens of thousands of dollars."
During the investigation, a reporter from China Business News found that in 2016, in order to “enclose land”, some social capital only took as little as 3 months to register as many as 500 electricity sales companies across the country.
Many of the registered offices of these companies are in residential buildings.
The sharp increase in the number of electricity sales companies has made the market competition extremely fierce.
The main person in charge of an electricity sales company under the above-mentioned central electric power enterprise told the first financial reporter that by 2018, his company began to suffer losses.
According to him, this year, in order to survive, many electricity selling companies started a price war.
At the same time, because the arbitrage model of power sales companies does not match the original intention of the reform of "discovering market prices and benefiting the people", many provinces have begun to make policy adjustments to control power generation companies and power users entering the monthly bidding transactions in the power market, and further Control the market price and limit the space for electricity sales companies to earn profit from the price difference.
In addition, by 2018, as the power surplus in the previous years has eased, the price difference between the market price and the benchmark price has been shrinking, and the profit margins of electricity sales companies have been squeezed.
Take Guangdong, where the electricity sales market data is relatively open, as an example. This year, according to the data released by the Guangdong Electric Power Trading Center, in the monthly centralized electricity bidding in June, the unified clearing price difference was -0.0393 yuan/kWh.
That is to say, for every kilowatt-hour sold by electricity sales companies, the revenue is less than 4 cents.
Also from 2018, Zhang Chuanming, who realized the changes in the market, began to continuously reduce the electricity sales business.
"At the peak of our prosperity, we had electricity sales companies in more than a dozen provinces across the country, and now only Guangdong, Jiangsu, Fujian, Anhui and Hunan remain." Kyushu Energy's employees have also been reduced from more than 200 at the time to the current 100 come.
By 2021, there will be a rare shortage of supply and demand in the country's electricity. In addition, rising coal prices will lead to rising costs for power generation companies, and many power generation companies will increase their losses.
Affected by this, electricity sales companies suffered large losses.
Taking Guangdong as an example, the data disclosed by the Guangdong Power Trading Center shows that in May 2021, the losses of 136 electricity sales companies in Guangdong reached 516 million yuan, accounting for more than 80% of the total number of 161 electricity sales companies in the province; There are 25 electricity sales companies making profits, and the total profit is only 7 million yuan.
Related illegal profit-making behaviors have also emerged one after another.
Some electricity sales companies take advantage of the information asymmetry between the wholesale and retail markets to transmit inaccurate wholesale market information to users, and squeeze out the profit sharing space of users to obtain additional income; some even forge qualifications and retail contracts for profit. or power of attorney and other materials to participate in the transaction.
For example, in February this year, the East Inner Mongolia Power Trading Center reported that a power sales company made an error when reporting monthly pre-purchased electricity on the trading platform instead of power users, resulting in a huge deviation fee of 1.4 billion for power users; in June, Guangdong Power Trading Center Disclosed many cases of electricity sales companies cheating, misleading users to sign retail contracts, and modifying the proportion of contracts with users without authorization.
The reshuffle of the electricity sales market is inevitable.
shuffle
On November 10, Zhang Chuanming posted an article on his WeChat official account with the title "Goodbye, another 89 electricity sales companies in Guangdong have graduated".
On November 4, the Guangdong Electricity Trading Center issued an announcement suspending the trading qualifications of 50 electricity sales companies that had not conducted actual transactions for 12 consecutive months, and 39 companies that had actual transactions in the past 12 months but were verified by verification as "not continuing to meet the requirements". Electricity sales companies that do not meet the registration access conditions” are restricted from new retail contract transactions. After the rectification is completed and the review is passed, the qualifications for new retail contract transactions will be resumed.
This is at least the second time such an announcement has been made by the Guangdong Power Trading Center this year.
On June 15, the Guangdong Power Trading Center issued an announcement to start the compulsory exit procedure for 266 electricity sales companies.
As of the end of 2021, there are 507 electricity sales companies in Guangdong.
In other words, the proportion of electricity sales companies that have been cleaned up twice in Guangdong has reached as high as 60%.
Guangdong is not an isolated case.
In October, 73 electricity sales companies in Guangxi were forcibly delisted; in July, 33 electricity sales companies in Yunnan were forcibly delisted or rectified; in May, 35 in Shandong, 46 in Beijing, and 39 in Hebei Electricity sales companies were forced to delist.
According to the data released by the National Development and Reform Commission in early 2022, there will be about 5,000 registered electricity sales companies nationwide in 2021.
That's half the number in 2018.
In this round of electricity reform, electricity sales companies play an indispensable role.
According to official data, in 2021, the national electricity market-based transaction electricity will be 3.8 trillion kwh, accounting for 45.5% of the electricity consumption of the whole society.
Most of the electricity is purchased and sold by electricity sales companies.
However, with the continuous deepening of electricity reform, the state has further implemented strict supervision on the electricity sales market.
Before the release of the "Basic Rules for the Electricity Spot Market (Draft for Comment)", on November 22, 2021, the National Development and Reform Commission and the National Energy Administration issued the "Administrative Measures for Electricity Sales Companies", clarifying the standards for the delisting of electricity sales companies, including: Has not carried out electricity sales business in any administrative region for 3 consecutive years; failed to meet the registration conditions continuously, and failed to make rectifications in place within the specified time; violated trading rules, disrupted market order, and committed fraud.
The above-mentioned measures also propose that the trading center should review the information and supporting materials of the electricity sales company's assets, personnel, business premises, and technical support systems every year to verify whether the electricity sales company meets the conditions for continuous registration.
A number of industry interviewees told CBN reporters that by strengthening market supervision, regulated companies can have better development space, thereby driving the healthy development of the industry.
Under the reshuffle, where is the development direction of the remaining electricity retail companies?
Respondents believe that the profit model of electricity retail companies as power intermediaries is relatively simple. With the gradual weakening of the "price difference" profit model and the continuous advancement of electricity reform, the growing and diversified needs of users also require electricity retail companies to quickly Open up new business and provide customers with precise services.
This also means that in the future, the electricity sales market will be further reshuffled and differentiated around competitions such as electricity scale, transaction level, financial strength, risk control, service level, professional capabilities, and comprehensive energy services, and the positioning of electricity sales companies will become clearer.
Power sales companies are mainly divided into three categories, namely, power sales companies under power generation companies, power sales companies under grid companies, and independent power sales companies.
Among them, independent electricity sales companies mainly rely on private capital.
The industry generally believes that in the competition among the three different backgrounds of electricity sales companies, power generation companies are more competitive because of their resource advantages, and independent private electricity sales companies have the weakest advantages.
But Zhang Chuanming didn't think so.
"Independent electricity sales companies and power plant (power generation companies) electricity sales companies have their own advantages. The latter has advantages in brand, price, and power guarantee, while the former generally excels in service."
In his view, the key to the survival and well-being of independent electricity retail companies is to properly handle the relationship between customers and power plants, and the other is data analysis capabilities.
He believes that data analysis is related to the decision-making and judgment of electricity sales companies on the market.
In the past few years, Zhang Chuanming has seen some peers forced out of the market due to mistakes in decision-making, and "too much courage, the result was shortfall, and finally lost to no money".
Talking about the future, Zhang Chuanming believes that with the continuous advancement of marketization, there will definitely be some electricity sales companies in the future whose operations in electricity sales and comprehensive energy services will become more and more stable.