Biomass power generation is difficult to enter the spot market!

Spot trading is not yet widespread

Mid-to-long deals still dominate

In fact, in the country, there are not many provinces that allow biomass power generation to participate in spot market trading.

In 2021, Jilin Province first tried, in the "Jilin Province 2021 non-market electricity distribution Plan" clearly stated that agricultural and forestry biomass power generation and waste power generation units are no longer fully guaranteed acquisition, in addition to the specified non-market electricity, excess electricity participate in market transactions. Jilin Province has also become the first province in China to propose to push some biomass (agricultural and forestry biomass and waste) power generation into the market.

Yuan Baorong, former deputy general manager of China Energy Conservation Consulting Company, told reporters that in the first year of some agricultural and forestry biomass and waste power generation to participate in market transactions, Jilin Province unified according to 5000 hours of power generation to determine the non-market electricity, this figure is 600 hours higher than the average power generation hours of agricultural and forestry biomass and waste incineration power generation enterprises in Jilin Province in 2020. It is 1014 hours higher than that of coal-fired thermal power.

In addition, on February 8 this year, the Xinjiang Development and Reform Commission issued the "Xinjiang Uygur Autonomous Region 2023 electricity market trading Implementation Plan", the plan clearly proposed that coal, biomass, comprehensive utilization of resources to power enterprises to enter the power market, biomass, comprehensive utilization of resources to power enterprises as thermal power enterprises to participate in market trading. All the electricity generated by new energy parity projects put into operation in Xinjiang from 2021 will be included in the electricity market, and relevant target feed-in tariff policies will be implemented. But Mr Yuan said: "Despite this, Xinjiang's new energy generation capacity is currently limited to medium - and long-term transactions, and biomass power generation has not yet been included in spot market transactions."

Yuan Aiping, director of Hunan Qiyuan Law Firm, which has long focused on the development of the biomass power generation industry, said that although more than 20 new energy sources in China have participated in electricity market transactions, they are mainly medium - and long-term transactions, while biomass power generation has not yet been included in the spot market transaction category.

International mature spot trading model

Provide reference experience

"At present, China's biomass power generation participation in the electricity spot market does still have some problems, but looking at the world, especially in Denmark and Germany and other European countries, the corresponding model has been very mature." Zhang Dayong, deputy secretary general of the China Industrial Development Promotion Association and Secretary General of the Biomass Energy Branch, pointed out that in the above countries, about 1/3 of the annual income of biomass power generation enterprises comes from market-oriented power trading, and spot trading is very active.

According to the "IEA Biomass Country Report 2021" released by the Biomass Energy Executive Committee of the International Energy Agency, in 2021, Denmark's total electricity generation capacity is 33.4 billion KWH, of which biomass power generation accounts for 23.17%. Zhang Dayong introduced that due to the popularity of the EU floating electricity price mechanism, Nordic countries, including Denmark, biomass power generation companies have basically participated in power spot trading.

Taking Denmark as an example, Zhang Dayong introduced that because Danish families have domestic hot water supply all the year round, domestic heat consumption is strong, and the heat price is higher than the electricity price for a long time. For this reason, most of Denmark's biomass energy projects are operated by cogeneration. Thanks to the mature heat storage technology, biomass power generation enterprises adjust the electricity generation in real time with the fluctuation of electricity prices. Enterprises directly participate in the spot trading of electricity during the peak of electricity consumption and the high price of electricity; When the price of electricity is low, companies will reduce electricity generation or convert surplus electricity into heat storage and sell heat for profit. "Sometimes there will be negative electricity prices in the spot market, and some companies will take the opportunity to 'buy electricity' to store heat and earn profits."

Expert advice

Spot trading should be aimed at industry pain points

So, why is China's biomass power generation participating in market transactions delayed? Why has the spot market not broken through?

Yuan Aiping said that at present, there are two "pain points" in carrying out biomass power generation in the country to participate in power spot trading. First of all, the prediction accuracy of renewable energy is relatively low, may face greater risk of market price fluctuations, and bear heavy deviation electricity assessment or balancing costs. Secondly, there are many kinds of policies involving renewable energy consumption and participation in the market. Including renewable energy subsidy mechanism, renewable energy consumption responsibility weight mechanism and other policies coordination needs to be strengthened, and the efficient connection between renewable energy spot trading and medium - and long-term contracts, green electricity trading, carbon trading is also an issue that needs to be considered.