State Council Releases Coal Coal Market Reform Opinions

In order to thoroughly implement the spirit of the 18th National Party Congress, the Chinese government network, in order to thoroughly implement the spirit of the 18th National Party Congress, speeded up the improvement of the socialist market economic system, and played a more fundamental role in the allocation of resources to a broader extent to form a scientific and rational coal operation. And adjustment mechanisms to ensure the stable supply of coal, and promote the sustained and healthy economic development, the State Council is now on the deepening of the reform of the coal market to provide guidance.

The opinion pointed out that the market-oriented reform of thermal coal is an important reform in the energy sector. We must adhere to the orientation of market orientation and give full play to the basic role of the market in allocating coal resources. With the cancellation of key coal contracts and the implementation of coal prices as the core, we must gradually establish a reasonable mechanism for the operation and regulation of coal to realize the coal and power industries. Sustained and healthy development ensures the economic needs of the economic and social development and people’s lives.

The main tasks of the market-oriented reform of electric coal include the establishment of a new mechanism for coal production and transportation, the strengthening of coal market construction, the improvement of the coal price linkage mechanism, the promotion of market-oriented electricity coal transportation reform, and the promotion of electricity market reform.

The full text of the comments is as follows:

General Office of the State Council Guiding Opinions on Deepening the Reform of Coal-fired Power Markets Guo-ban [2012] No. 57

The people's governments of provinces, autonomous regions, and municipalities directly under the Central Government, the ministries and commissions of the State Council, and the agencies directly under the State Council:

In order to thoroughly implement the spirit of the Party's 18th National Congress, speed up the improvement of the socialist market economic system, and play a more fundamental role in the allocation of resources to a wider extent, form a scientific and reasonable mechanism for the operation and regulation of coal, and ensure the protection of coal To stabilize supply and promote sustained and healthy economic development, with the approval of the State Council, we now propose the following guidelines for deepening the market-oriented reform of coal power:

I. Grasp the Opportunity to Deepen the Market-oriented Reform of Thermal Power Coal

Coal is China's basic energy, accounting for about 70% of primary energy production and consumption. Electricity coal is the main body of coal consumption, accounting for more than half of the total consumption. To deepen the market-oriented reform of coal power and do a good job of connecting production, transportation, and production needs is of great significance for ensuring stable supply of electric coal and normal production of electricity, and meeting the needs of economic development and people's lives. Since the 1990s, China's coal market order reform has been continuously promoted, and prices have been gradually liberalized. The implementation of government guide prices and key contract management for the coal included in the order scope has played a positive role in safeguarding economic development. However, due to the significant differences in the supply of resources, capacity allocation, and price levels between key contracts for coal power and market coal, the role of market mechanisms has been limited, unfair competition has been created, disputes have arisen at the time of contract signing, and the implementation rate is low. Not conducive to the stable supply of coal, more and more not meet the requirements of the development of the socialist market economy, the reform is imperative. Since the beginning of this year, the situation of coal supply and demand has emerged in recent years with little loosening. The difference between the key contracts for coal and market coal prices has been significantly reduced, and there have been upside down in some places. The operating conditions of power companies have improved, and the conditions for reform have been basically mature. To this end, it is necessary to seize the current favorable opportunity and unswervingly advance the reform.

Second, the main task

The market-oriented reform of thermal coal is an important reform in the energy sector. We must adhere to the orientation of market orientation and give full play to the basic role of the market in allocating coal resources. With the cancellation of key coal contracts and the implementation of coal prices as the core, we must gradually establish a reasonable mechanism for the operation and regulation of coal to realize the coal and power industries. Sustained and healthy development ensures the economic needs of the economic and social development and people’s lives.

(1) Establish a new mechanism for the connection of production and transportation of thermal coal. Since 2013, the major contracts have been cancelled and the dual-track system for coal prices has been cancelled. The Development and Reform Commission no longer issued an intentional framework for the inter-provincial coal railway transportation capacity allocation in the year. Coal companies and power companies have signed contracts on their own, and negotiated prices independently. Encourage both parties to sign medium and long-term contracts. Local people's governments at various levels shall not interfere with the normal operations of coal-fired power companies. The Coal Industry Association was commissioned to summarize the signing and implementation of the contract. The transportation department must organize good transport links, and the contracts for the implementation of transport capacity shall be filed by the National Development and Reform Commission, the Ministry of Railways and the Ministry of Transport.

(b) Strengthen the construction of the coal market. Accelerate the improvement of regional coal market, gradually cultivate and establish a national coal trading market, and form a unified, open, competitive and orderly coal trading market that is supplemented by the national coal trading center and supplemented by the regional coal market and compatible with China’s socialist market economic system. The system provides a relatively complete market for the implementation of coal market reforms. The Coal Industry Association, under the guidance of the National Development and Reform Commission, has made convergence coordination, studied and formulated trading rules, and cultivated and developed the national coal trading market system.

(c) Improve coal price linkage mechanism. Continue to implement and continuously improve the coal price linkage mechanism. When the price fluctuation of coal exceeds 5%, adjust the on-grid tariff accordingly in an annual cycle, and adjust the proportion of the fluctuation of the price of coal consumed by the power company from 30% to 10%. . In view of the current contract price of coal and market coal coal prices close, the overall price of electricity on the grid after the coal price is not adjusted for the time being, for individual issues as the case can be individually resolved.

(4) Advance the market-oriented reform of coal transportation. The Ministry of Railways and the Ministry of Transport shall strengthen the guidance to the relevant road bureaus and port and shipping companies, improve the coal transportation capacity trading market, and rationally allocate the capacity and maintain relative stability in accordance with the contracts and transportation capabilities signed by the coal supply and demand sides, for large and medium-sized coal-fired power enterprises. The signed medium and long-term coal contracts are given priority to ensure transportation. The act of signing a false contract, causing a waste of capacity or not fulfilling capacity, and affecting the allocation of resources must be punished in accordance with regulations. The Ministry of Railways must carefully formulate the measures for the management of electric coal railway transportation and further establish an open and fair capacity allocation mechanism.

(E) to promote the reform of electricity market. Encourage coal and electricity joint ventures to enhance mutual protection capabilities. To improve power generation dispatching methods, and on the basis of prioritizing the dispatch of energy-saving, environment-friendly and high-efficiency units, gradually increase the economic dispatching factors. Under the same conditions, priority should be given to the generation of low-cost generators to the Internet to promote the improvement of management, reduce energy consumption, and improve the technological level. The implementation of competitive bidding reform exploration experience.

Third, improve regulatory control system

Strengthen and improve supervision and control of the market according to law, and create a fair and just market competition environment. To formulate plans for coping with abnormal fluctuations in the price of coal, and when abnormal fluctuations occur in the prices of electric coal, temporary intervention measures should be taken in accordance with the relevant provisions of the price law. We will make full use of both domestic and foreign markets and resources, strengthen the regulation of coal import and export, and promote the balance between supply and demand. Strengthen the construction of emergency coal reserves and improve the supply and emergency response plan. Strengthen the supervision of coal operations and the inspection of coal contracts, standardize the circulation order, further clean up and cancel unreasonable charges, and strictly investigate and prosecute unlawful acts such as random price increases, arbitrary charges, and collusion of price increases. Coal and electricity industry associations should strengthen communication and cooperation with government departments, strengthen the establishment of corporate credit system, and do a good job of industry self-discipline.

Fourth, effectively strengthen organizational coordination

The market-oriented reform of coal power involves major interest adjustments and high social attention. All localities and relevant departments should unify their thinking, raise awareness, strengthen the overall concept, strengthen coordination and cooperation, and form a concerted effort. The Development and Reform Commission shall, in conjunction with the relevant departments, give full play to the role of the inter-ministerial coordination mechanism for the coal and gas oil and gas transportation support work, coordinate and resolve the major issues in the coal coal marketization reform in a timely manner, and guide the coal production, transportation, and demand adaptation work. At the same time, continue to strengthen the research on major issues such as reform of electricity price formation mechanism, power system reform, and coal futures market construction.

Office of the State Council December 20, 2012