Source: Economic Information Daily Date: Feb. 23, 2016
General Office of the State Council forwarded Opinions on Implementation of a New Round of Rural Power Network Transformation & Upgrading Project during the Period of 13th Five-Year Plan of NDRC a few days ago. Up to 2020, nationwide rural area would realize full coverage of stable and reliable power supply service basically, the power supply reliability rate of rural power network would reach to 99.8%; meanwhile the reform of electric power system would be further deepened, power supply enterprises at the county level would build modern enterprise system basically, the “escrow system” would be cancelled completely, and the pilot reform of joint stock system of power grid enterprises at the county level would be carried out in those regions with conditions.
The rural power network is an important rural infrastructure. Since 1999, power enterprises has begun to carry out “Two Reforms with the Same Price” of rural electricity, and the transformation and upgrading of rural power grid and the energization project for people without electricity energetically. Since 2005, the central government has put forward the transformation and upgrading of rural power network in No. 1 Document continuously for many times. In 2014, the nation issued National New-type Urbanization Plan (Year 2014-2020), which put forward higher requirements for the power supply capacity in urban and rural power distribution networks and power distribution reliability. No. 1 Document of central government in 2015 clearly required to continue to implement the transformation and upgrading project of rural power network again. The structure of rural power network was improved greatly, the ability of electric power supply was promoted obviously, the same price in the same net was basically realized, which thoroughly solved the electricity utilization issue for people without electricity. However, restricted by various factors such as natural environmental condition and problems left over by history, the urban and rural gap in electric power service was very obvious, and the power grid construction in poverty-stricken areas and faraway national minority areas lagged relatively.
As for it, the central government put forward carrying out a new round of rural power network transformation project during the period of the 13th Five-Year Plan. It was worth noting that, unlike the previous situation, a new round of the transformation and upgrading project of rural power network would combine with the promotion of new-type urbanization, agricultural modernization and poverty alleviation removal and so on, actively adapt to new-type industrial development such as agricultural products process, rural tourism, rural e-commerce, and the electricity demand of peasant consumption upgrading, rationally determine transformation standard, and boost electric network transformation and upgrading of new-type small towns and central village.
Huatai Securities regarded that, it would drive the increase of investment in power grid during the period of the 13th Five-Year Plan, meanwhile it would promote distributed photovoltaic projects, especially the construction of complementation of farming with photovoltaic projects and integration of fishery with photovoltaic projects. Analyst Yu Bing from Pingan Securities also indicated that, with stable increase + poverty alleviation, a new round of the transformation and upgrading of rural power network was therefore timely. On the whole, it was expected that the investment scale would exceed 700 billion yuan. While in 2015, National Energy Administration printed and issued Action Plan for Construction & Transformation of Power Distribution Network, put forward that the investment in distribution network should be not less than 2 trillion yuan from 2015 to 2020. It was estimated that in this round, the investment scale of not less than 700 billion yuan should be included within the scope of the 2 trillion yuan, and the overall trend of upward relevant concept stocks had been ensured.
Opinions put forward that the reform of electric power system should be deepened. Those power grid enterprises at the county level should build modern enterprise system by means of limited liability company, incorporated company and other forms. Up till 2020, the “escrow system” should be cancelled completely. And the joint stock system pilot reform of power grid enterprises at the county level should be carried out in those areas with conditions.
As believed by local power personnel, the vertically integrated management mode implemented by the central power grid enterprises, greatly intensified the highly monopolistic electricity system, and local power property rights “were obscured”, therefore, the market-oriented reform of electricity system also encountered obstruction.
“This round of transformation of rural power grid conformed to the theme of electricity reform and laid foundation for it. The previous power grid construction was not opened, and power grid property right at the county level was very complex, so after further confirmation by reform, more multiplex subjects could participate. In the meantime, the markets at the county level at current user side were not so large, and the touched interests in reform were relatively little, so it was very easy to promote.” The Senior Analyst Han Qiming from Energy Environmental Protection Department of Shenwan Hongyuan Securities told the reporter of Economic Information Daily.
However, Yu Bing also said frankly that, because of the low rate of return on investment in rural power grid, power grid enterprises didn’t have high enthusiasm in the investment in rural power grid. The new round of investment in rural power grid may depend on central budget investment mainly, with a long way to go on aspect of attraction of social capital.
