Liaoning Opens Power Generation Right Trade Market to Promote Environment Protection

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Researched by Industrial Info Resources (Sugar Land, Texas). Dalian Power Plant, owned by China Huaneng Group (Huaneng Dalian) (Liaoning, China) and Jingzhou Donggang Power Company, Limited (JDPC) (Liaoning, China), has signed the first power generation right agreement at the newly established Power Trade Hall of Liaoning Power Grid Company (Liaoning, China) in Northeast China’s Liaoning province on July 4, 2007. According to the agreement, part of the power generation quota from the 200-megawatt (MW) units owned by JDPC will be sold to Huaneng Dalian and added to its existing 350 MW units. This marks that in the power market of Liaoning province is officially operating, and the power generation right trade market is fully opened in Liaoning province.

Trade on power generation right could promote energy saving and the reduction in pollutant emission, and protect the environment,” introduced by Jin Zhonghe, vice director of the Liaoning Power Trade Center. Usually, a coal-fired generating unit with larger capacity has less coal consumption per kWh. Compared with a 200 MW unit, the energy consumption of the 350 MW unit is much lower. Both parties could benefit from the transfer of power generation right. Due to the reduction in energy consumption and pollutant emission, trade on power generation right could finally benefit the entire society.

Following the swift development in power construction, power demand and supply in China has reached basic balance, with a surplus in some regions. Under such a background, the Comments on Accelerating the Shutdown of Small Thermal Power Units was issued by the National Development and Reform Commission (NDRC) upon the examination and approval of the State Council early this year. It is proposed in the Comments to take full advantage of market mechanism, gradually shutting down small thermal power units by comprehensive utilization of economic, legal and administrative means. Replacing small thermal unit with large capacity and efficient units, carrying out paid transfer of power generation rights, could reduce small thermal units from the market, and gradually realize the transfer and reemployment of staff.

The installation capacity of middle and small generating units of 135 megawatts or lower is as high as 150 million KW in China at present, and their average coal consumption is over 390 g/kWh, while the average coal consumption of 300 MW units is less than 330 g/kWh. If all the power produced by middle and small generating units could be produced by high efficient units, about 120 million metric tons of coal can be saved every year.

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