"Gas" natural gas power generation ① : As a clean energy, the role is quite awkward

Since the 1990s, China's natural gas power generation industry has experienced nearly three decades of continuous development. But today, it is still difficult to get rid of the relatively embarrassing role: clean and low-carbon gas electricity is essentially fossil energy, the cost of power generation is not competitive with coal power, and it is not as "zero-carbon clean" as wind and solar power generation, and its living space is double squeezed by coal power and new energy. "No name, no status", although it is a joke in the industry, but it is the true portrayal of gas and electricity.

With the rapid development of the domestic energy and power industry, China's installed capacity of coal power, hydropower, wind power and solar power ranks first in the world, the installed capacity of nuclear power commercial operation ranks third in the world, and the scale under construction ranks first in the world. The installed capacity of clean energy power generation has increased to about 40%. In contrast, by the end of 2020, the installed capacity of domestic gas power generation was 98.02 million kilowatts, accounting for 4.45% of the total installed power generation, far lower than the global average of about a quarter. The share of electricity generation is only 3.26%, which is also well below the global average of 23%.

In the official statistical caliber of the industry, gas and electricity are grouped under the name of "thermal power", and there is no official "name". Compared with coal power plants, the carbon emission level of gas power plants is about 50% of that of coal power plants, but the average generating hours of gas turbines in China are only less than 70% of that of coal power plants.

In the downstream gas consumption scale of natural gas, gas and electricity are ranked after urban gas and industrial fuel. Looking horizontally and vertically, gas electricity is like a wronged "doormat" that has been dormant for a long time. Although the average annual growth rate of gas power installed capacity reached 9.69% during the "13th Five-Year Plan" period, the real "spring" of the gas power generation industry will always arrive.

Constrained by "qi", it is difficult for gas and electricity to enter the C position

Gas price and gas source are the "bottleneck" that restricts the natural gas power generation industry in China for a long time, and the economic shortboard has suppressed the value of its low-carbon environmental protection advantages and flexible power sources. "It is not that the electric people are not good, but subject to 'gas'." A senior practitioner in the gas and electricity industry joked that either the gas source is out of breath, or the gas price is too expensive to let people go.

This has led to widespread losses in domestic natural gas power generation enterprises. Faced with high fuel costs, many governments have adopted measures such as financial subsidies and two-part electricity prices to solve the problem. However, with the expansion of the installed scale of gas electricity, the pressure of cost relief is also increasing.

"High gas prices, interruptions in gas sources and imperfect policies are the three major problems facing the development of gas and electricity." Guo Jiaofeng, a researcher at the Institute of Resources and Environmental Policy at the Development Research Center of The State Council, told The paper (www.thepaper.cn) that there are three "soft spots" in the gas and electricity industry. The most fundamental problem is that the price of natural gas as a fuel is generally too high. Generally, gas-fired power plants pay between 2.5 yuan and 3 yuan per cubic meter of gas. "This leads to the gas unit to maintain capital, the price must reach 0.6 yuan/KWH, compared with hydropower, coal, nuclear power, wind power, photovoltaic power generation, gas power in the price is not competitive."

Zhu Xingshan, deputy chief economist of the Planning and Planning Department of China Petroleum Group and Secretary general of the Petroleum Economics Special Committee of the Chinese Petroleum Society, also calculated an account in an online meeting in July 2020: At the gas price level of 2.2-2.7 yuan/cubic meter, the power generation cost of gas-fired power plants in typical areas of China is about 0.56-0.58 yuan/KWH, of which fuel costs account for about 70%-75%. The cost of gas electricity is between photovoltaic power generation and biomass power generation and offshore wind power.

The high price of gas has pushed up the price of gas and electricity, and the on-grid price of gas and electricity units has been at a high level for a long time. This determines that gas power lacks the confidence to compete with other traditional power sources in the power market competition. With the "14th Five-Year Plan" wind power, photovoltaic fully into the era of parity and bidding, the competitive pressure from the power market will increase day by day: renewable energy has no carbon emissions, and the marginal cost is close to zero, and has the most advantages in the power market.

In addition to the unbearable pain of gas prices, the stability of gas sources also affects the efficiency of natural gas power generation. Guo Jiaofeng said that gas-fired power generation needs a large number of continuous and stable natural gas supply, but under the monopoly of a few enterprises, in recent years, gas-fired power plants often become the main object of short or even interrupted supply when the natural gas supply is tight, affecting its normal operation and market investment enthusiasm.

It is also understood that because the gas used in the power plant is relatively biased after the natural gas distribution order, especially in the winter, when the gas is mainly used by the people, some units are difficult to ensure the normal maintenance of gas.

In terms of policy, Guo Jiaofeng proposed that not only the peak regulation and environmental protection value of gas and electricity lack a perfect electricity price mechanism to reflect, but also the distributed energy of natural gas has hindered large-scale development due to the difficulty of power grid connection. "Although the energy authorities have introduced too many policies such as complementary energy and integration of wind, water, fire and storage, gas and electricity should be in what position and how to play a role in the coordinated development of other power sources, and the policy level lacks clear positioning and guidance."

The relatively high price of gas and electricity makes the distribution of gas and electricity units highly correlated with the level of economic development, which is mainly concentrated in the economically developed Yangtze River Delta, Pearl River Delta and Beijing-Tianjin region. Guangdong, Jiangsu, Zhejiang and Shanghai are the provinces with the highest concentration of gas-fired power plants in China.

The high proportion of renewable energy challenges the power system, and the flexibility of gas and electricity is highlighted

However, the awkward situation of natural gas power generation does not mean that natural gas power has no comparative advantages.

The proposal of the "3060" dual-carbon target, the tightening of carbon constraints around the country, and the ongoing reform of the oil and gas system are reshaping the industrial pattern of natural gas power generation. A number of industry insiders interviewed told the Surging news that the construction of a new power system with new energy as the main body can not be absent. In front of gas and electricity, there is still a strategic opportunity period of at least 10 years.

On one side of the coin, the gas power is expensive and the fuel cost is inferior, on the other hand, the gas power is clean and low-carbon compared with coal power, and it matches with a high proportion of fluctuating renewable energy to ensure the stable operation of the grid.

By the end of 2020, China's total installed capacity of wind power and solar power generation is about 530 million kilowatts, accounting for about 24%. According to the carbon reduction target announced by China, the installed capacity of new wind and solar power generation will reach more than 1 billion kilowatts in the next decade, nearly doubling the total proportion. Renewable energy is accelerating from a supporting role to a leading role in the energy system, which is unstoppable globally, but its long time and high power makes the power system face great challenges in the traditional security of supply issues such as operational safety, adequate capacity and system resilience.

"The main force of direct emission reduction and the driver of indirect emission reduction." Liu Zhitan, secretary-general of the Jiangsu Provincial Energy Bureau Natural gas power generation and distributed energy Engineering Research Center, said to the paper news that the role of gas and electricity in the context of low-carbon transition. The so-called direct emission reduction refers to the replacement of small coal power and coal-fired boilers with gas electricity to achieve direct carbon emission reduction benefits. Indirect emission reduction, gas electricity as a flexible power supply to provide support for the development of renewable energy.

With the rapid expansion of renewable energy such as wind power and photovoltaic with obvious characteristics of volatility, randomness and intermittency, their proportion in the power grid is getting higher and higher, and the demand for flexible power supply in the power grid is becoming more and more urgent. Only equipped with sufficient flexible power supply can "smooth" the "wayward" renewable energy, so as to maintain the safety and stability of the grid.

Liu Zhitan introduced that according to international experience, under normal circumstances, the power grid should be configured with about 15% flexible power supply, otherwise the development of renewable energy will be inhibited to a certain extent. At present, the proportion of flexible power supply in China is only 6%, mainly pumped storage, gas electricity and a small amount of hydropower with regulating capacity. "The long-term shortage of flexible power supply in China's power system, coupled with the world's first growth rate of new energy, this contradiction has become even more prominent."

According to the "Research on the Flexible Operation Policy of Coal power Units" released by China Electric Union in December 2019, the proportion of flexible power supplies in Europe and the United States is generally high, with Spain, Germany and the United States accounting for 34%, 18% and 49% respectively. In China's new energy rich "three North" area, wind power, solar power installed capacity accounted for 72% of the country, 61%, but the flexible adjustment of power supply is less than 3%, adjustment capacity is inherently insufficient.

Before the energy storage technology breaks through the economic constraints and realizes large-scale commercial application, pumped storage, gas turbine units and coal power units with flexible transformation can all be used as flexible power sources of the power grid, and the three have advantages and disadvantages: pumped storage technology is mature and rapid response, but limited by site resources and construction period, far from hydrolyzed. The peak load balancing capacity of single-cycle gas turbine unit can reach 100%, and that of combined cycle unit can reach 70-100%, but they are faced with high gas price and gas source constraints. Coal power can improve the adjustment capacity to a certain extent through flexible transformation, but it needs to sacrifice the unit operating efficiency and increase coal consumption to lower the load. From the carbon emission results, the total carbon emission of the coal-fired unit after the flexibility transformation is still much higher than that of the gas-fired unit.

There is a more radical view that China's energy can be based on coal, over oil and gas directly transition to a zero-carbon system based on new energy. It sounds beautiful, but it's impractical. Under the rapid development of new energy, improving the flexibility of the power system has become a priority. Since energy storage technology is not yet commercially available on a large scale, a balanced power system requires the deployment of flexible technologies, including natural gas generation.

"I personally think this view is inappropriate (note: refers to the direct transition from coal-based over oil and gas to a zero-carbon system based on new energy). First, at present, China's power system does not have the ability to support new energy. The second is that this energy transition is too costly. To build a new power system, we should take the parallel road of energy structure adjustment and renewable energy development, that is, low carbon and zero carbon parallel." Tang Guangfu, academician of the Chinese Academy of Engineering and president of the Global Energy Internet Research Institute, recently said in an interview with the State Grid Magazine that the EU's clean energy and low-carbon development road has given us a lot of inspiration. We should adjust the energy mix by reducing the use of coal and increasing the use of oil and gas. Although China is highly dependent on foreign oil and gas, it is impossible to use natural gas in large quantities like Europe, but it should also moderately develop oil and gas resources, especially the development of natural gas power generation peak adjustment, in order to cooperate with the large-scale development and utilization of volatile and intermittent renewable energy. If we ignore the development of power grid peak load control resources, it will bring a huge and insurmountable technical gap to the construction of new power system.

Tang Guangfu cautioned that there is a misconception in the industry that as long as the energy storage problem is solved, everything will be solved. Of course, energy storage is to be vigorously developed. Energy storage can also meet some of the needs of peak cutting and valley filling, but energy storage can not completely replace flexible power supply. Before energy storage becomes a large-scale flexible power supply, it must rely on natural gas power generation or coal power with flexible transformation as a flexible power supply. The reason why the transition in the United States and Europe is more successful is that there is a large number of natural gas power generation as a flexible power source for peak balancing.

From the practice of European countries, the process of coal withdrawal has accelerated as aggressive climate policies and high carbon prices squeeze the profit margins of coal power plants. At the same time as the annual decline in coal power generation, renewable energy generation is increasing, and natural gas power generation as a flexible power source is also gradually rising.

"It is impossible to give up natural gas transition energy as a ferry car and want to directly board the new energy + energy storage bridge." Zhang Haicheng, chairman of Huizhou Deep Energy Fengda Power Co., LTD., said that the more renewable energy on the horse, backup power and flexibility measures should also grow at the same time, which is obviously insufficient. He told the surging news that under the existing technology path, on the way to the peak of carbon to balance the relationship between the expansion of energy demand brought by economic growth and emission reduction, there are not many options, and gas electricity as a flexible power supply and peak load unit is the most realistic choice.

Ye Chun, deputy director of the industry development and environmental resources department of the China Electric Power Union, is more optimistic about the prospects of gas and electricity development. "3060" target on the development of renewable energy to press the fast forward key, due to the characteristics of renewable energy, under the current grid planning and structure, there is a need for sufficient capacity and flexible power plants to adjust the grid load peaks and valleys. On the one hand, natural gas power generation with fast start-stop speed and flexible operation is currently a better peaking and frequency modulation power supply, and natural gas power generation has a broad space for development when energy storage can not play a greater regulation potential. On the other hand, compared with coal power, natural gas power generation is cleaner and low-carbon, and will become an important transition power source for building a new power system with new energy as the main body. "According to the development vision, the installed capacity of new energy in the country will reach 5 billion kilowatts, 50% of wind and light, 13 trillion KWH of electricity demand, and the maximum load of 5,200 hours." At the same time, considering the allocation of 10% to 15% of new energy storage, a large number of conventional units, energy storage, and demand-side response are still needed to help achieve power balance, and natural gas power generation still needs at least 100 million kilowatts."

The special place of natural gas power generation is that the upstream natural gas field and the downstream power field are undergoing market-oriented reform at the same time, and the price system needs to be straightened out. In order to promote the advantages and avoid the disadvantages, reducing the gas price and expanding the gas source is still an inescapable topic. So, is there a solution to high gas prices? And, for China, whose dependence on natural gas has climbed to 43%, is there enough natural gas to support the development of gas and electricity? In the next post, we will return to the source, starting with whether there is enough gas.