Polaris Power Sales Grid News: Polaris Power Sales Grid learned that the Shandong Energy Supervision Office of the National Energy Administration, the Shandong Provincial Development and Reform Commission, and the Shandong Provincial Energy Administration recently issued a notice on soliciting opinions on the "Shandong Province Electric Power Spot Market Trading Rules", "Shandong Province Electric Power Medium- and Long-term Market Trading Rules", and "Shandong Province Electric Power Retail Market Trading Rules" (draft for soliciting opinions). In order to implement the country and ShandongMarket-oriented reform of electricityDeployment: On June 11, 2019, Shandong Province publicly solicited opinions from the public on the "Shandong Province Electric Power Spot Market Trading Rules" and the "Shandong Province Electric Power Medium- and Long-term Market Trading Rules" (draft for soliciting opinions). Based on research and demonstration of opinions from all aspects, based on the actual reform of Shandong Province's power market, the "Shandong Province Electric Power Spot Market Trading Rules" and "Shandong Province Electric Power Medium- and Long-term Market Trading Rules" were revised again, and the "Shandong Province Electric Power Retail Market Trading Rules" were drafted, forming the second draft for soliciting opinions. We are now soliciting opinions from all parties concerned and requesting feedback from all sectors of society before February 12, 2020.

The medium- and long-term market trading rules of Shandong Province's electricity are applicable to the medium- and long-term market trading of Shandong Province's electricity that is connected with the spot market trading of Shandong Province's electricity. Regarding price, considering factors such as the operation of power generation enterprises and the electricity price affordability of market users, the upper and lower limits of market transaction prices are set for bilateral negotiated transactions, centralized bidding transactions, listing transactions, and base contract transfer transactions. The market management committee will make suggestions and implement them after approval by the Provincial Energy Bureau and Shandong Energy Supervision Office.

[Declaration price constraint] Set upper and lower limits on the declaration price of centralized bidding transactions, and the Market Management Committee will make suggestions and implement them after approval by the Provincial Energy Bureau and Shandong Energy Supervision Office.

Details are as follows:

Shandong Province Electric Power Medium- and Long-term Market Trading Rules (Second Draft for Soliciting Opinions)

Article 1.1 [Purpose basis] In order to standardize medium- and long-term power market transactions in Shandong Province, safeguard the legitimate rights and interests of power market entities in accordance with the law, and ensure the openness, competition and order of the power market, according to the "Several Opinions of the Central Committee of the Communist Party of China and the State Council on Further Deepening the Reform of the Power System" (Zhongfa [2015] No. 9), "Notice of the General Office of the National Development and Reform Commission and the National Energy Administration on Carrying out the Pilot Work of the Spot Market Construction of the Power" (Development and Reform Commission and the General Office of the National Energy Administration (Notice of the General Office of the National Development and Reform Commission and the Comprehensive Department of the National Energy Administration on Deepening the Pilot Work of the Spot Market Construction of the Power Market" (Development and Reform Commission and Reform Commission and the Comprehensive Department of the National Energy Administration) (Development and Reform Commission and the Energy Administration Comprehensive Department of the National Energy Administration) (Development and Reform Commission and the Energy Administration on Deepening the Pilot Work of the Power Spot Market Construction" (Development and Reform Commission and the Energy Regulation [2019] No. 828), and "Notice on Issuing the Special Implementation Plan for Shandong Province's Power System Reform" (Lufa and Reform Commission and Reform Commission [2017] 788 These rules are formulated in combination with the actual situation in Shandong.

Article 1.2 [Scope of application] These rules apply to Shandong Province's medium- and long-term power market transactions connected with Shandong Province's electricity spot market transactions.

Article 1.3 [Definition] The medium- and long-term power market transactions referred to in these rules mainly refer to the year, month and weekly electricity energy market transactions conducted by market-oriented power generation enterprises, power sales companies, power users and other market entities that meet the access conditions.

Article 1.4 [Medium- and Long-term Market] The medium- and long-term power market adopts a trading method that combines bilateral negotiated transactions, centralized bidding transactions and listing transactions, and a combination of commonly used curve contracts and custom curve contracts. Through the year, month and weekly trading varieties organized repeatedly, the flexible signing and adjustment of medium- and long-term contracts are achieved, and the traded electricity contracts are used as the basis for settlement. The transaction subjects in the medium and long-term market include annual priority power generation and government base contracts and market contract electricity.

Article 1.5 [Access and Exit and Information Disclosure] Market members’ access and exit, information disclosure, etc. shall be implemented in accordance with the requirements of the "Shandong Province Electric Power Spot Market Trading Rules". Article 1.6 [Implementation Subject] The Shandong Supervision Office of the National Energy Administration (hereinafter referred to as Shandong Energy Supervision Office) shall, together with the Shandong Provincial Development and Reform Commission (hereinafter referred to as the Provincial Development and Reform Commission) and the Shandong Provincial Energy Administration (hereinafter referred to as the Provincial Energy Administration) formulate these rules. Shandong Energy Supervision Office, Provincial Development and Reform Commission, and Provincial Energy Bureau shall perform the duties of Shandong Electric Power medium- and long-term market transaction supervision in accordance with the law in accordance with the functions.

Section 1 Inter-provincial medium- and long-term transactions Article 2.1.1 [Connection between inter-provincial and medium- and long-term markets] The two parties shall agree in advance on the transaction curve as the basis for settlement in medium- and long-term power generation contracts and medium- and long-term market-oriented transaction contracts. Before the cross-provincial power transmission plan based on national plans is liberalized, representatives of Shandong Power Grid Company or other enterprises authorized by the government will sign a tripartite medium- and long-term contract with the generator and transmitter, and agree on the use conditions for typical power transmission curves and transmission capacity. Article 2.1.2 [Inter-provincial medium- and long-term trading timing] Inter-provincial medium- and long-term trading will be opened on the Beijing Electric Power Trading Center trading platform on a year-on-month basis, forming a typical contract curve. It can be adjusted and physically executed according to renewable energy consumption, power grid operation, etc. within the month.

Section 2 Base Contract

Article 2.2.1 [Annual Base Contract] The annual base contract is issued by government departments to power generation enterprises, including annual priority power generation and base contract electricity, and implements the on-grid electricity price policy approved by the government. The power scale is determined in accordance with the relevant national regulations on the orderly discharge and development power supply plan. The annual base contract electricity is deemed to be the bilateral trading electricity of the factory network, and the "heat-based electricity" electricity in the priority power generation shall not be transferred. Article 2.2.2 [Agenda Base Contract Power Arrangement] Government departments comprehensively consider the province's electricity demand, as well as factors such as the power transmission and reception capacity across provinces and regions, renewable energy generation capacity and foreign-related unit combination power, and arrange the annual base contract power. The annual base contract electricity is issued by the government department and decomposed by the power trading agency to serve as the settlement basis for power generation companies.

Article 2.2.3 [Pre-decomposition of electricity in annual base contract] The power trading institution pre-decomposition of annual base contract electricity in accordance with historical power load data and typical load curves, and adjusts it according to the principle of "using the fixed issuance" during settlement.

Section 3 Medium- and long-term trading products and cycles Article 2.3.1 [Medium- and long-term electricity energy trading] Medium- and long-term electricity energy trading in the province is mainly organized and carried out in cycles of years, months and weeks. Combined with market development, shorter cycles (more than days) can be added.

Article 2.3.2 [Medium- and Long-term Trading Classification] Medium- and long-term trading is divided into annual, monthly and weekly trading at this stage; it is divided into commonly used curve contract trading and custom curve contract trading; it is divided into bilateral negotiated trading, centralized bidding trading, listing trading, base contract transfer trading, etc.

4 Article 2.3.3 [Bilateral Negotiated Transaction] Bilateral Negotiated Transaction refers to the independent negotiation of the contract period, contract power, transaction price, and decomposition curve elements between market entities. The contract is signed through the trading platform and will take effect after confirmation by relevant parties and verification of the transaction.

The transaction subject is medium and long-term electricity energy with the calendar day as the basic unit and the calendar week as the minimum contract period.

Article 2.3.4 [Centralized Bidding Trading] Centralized Bidding Trading is organized and carried out on the trading platform. Market entities declare their trading intentions. The trading platform automatically matches and matches the transaction, and adopts a common decomposition curve. Centralized bidding transactions are carried out in two stages: call bidding and continuous bidding.

Centralized bidding transactions are divided into annual centralized bidding transactions, monthly centralized bidding transactions and weekly centralized bidding transactions. The annual centralized bidding transactions are carried out at the end of each year, monthly centralized bidding transactions are carried out every month, and weekly centralized bidding transactions are carried out every week.

Article 2.3.5 [Listing Trading] Listing transactions are organized and carried out on the trading platform, and the transaction is carried out by delisting, and the transaction price is the listing price. The electricity transactions in the subsequent months of the year are organized every week, and the trading electricity is not crossed by the natural year. The trading electricity is formed according to the decomposition curve of the listed party.

Article 2.3.6 [Basic Contract Transfer] Base Contract Transfer Transactions are carried out between power generation companies without curve decomposition. Bilateral negotiation and centralized bidding transactions can be adopted. The power outage of the unit that was shut down early as confirmed by the government department must be transferred through bilateral negotiation transactions. Base contract transfer transactions are conducted monthly.

Article 2.3.7 [Upper limit of medium- and long-term contracts] sets net contract volume limits and cumulative trading volume limits for medium- and long-term transactions of market entities. The main limit on the power generation side is determined based on the assembly capacity of the machine and the historical available power generation hours, and the main limit on the user side is determined based on the historical practical power consumption in principle.

Section 4 Medium- and long-term contract elements

Article 2.4.1 [Medium- and Long-term Contract Elements] Medium- and long-term contract elements should at least include the contract period, contract power, transaction price, decomposition curve and other elements. Among them, the transaction price is the unified electricity price during the transaction start and end time.

Article 2.4.2 [Medium- and Long-term Trading Unit] Medium- and Long-term Trading Unit:

(1) Power generation enterprises sign medium- and long-term transaction contracts through bilateral negotiations using legal entities or non-independent legal entities authorized by legal entities as trading units, and the contracts need to be decomposed into the unit. Use the unit as the trading unit to participate in centralized bidding and listing transactions.

(2) Power sales companies and wholesale users participate in market transactions using legal entities as trading units. Wholesale users of non-independent legal entities can participate in market transactions as trading units authorized by the legal entities.

(III) The two parties to the transaction of bilateral negotiation transactions, centralized bidding transactions, listing transactions, and base contract transfer transactions in medium and long-term markets cannot be the same trading unit. Article 2.4.3 [Contract Period] The start and end time of a contract is based on the calendar day as the basic unit and the calendar week as the minimum agreed contract period.

Article 2.4.4 [Contract Power] Contract Power refers to the total amount of electricity traded during the contract period. The methods for confirming contract electricity include bilateral negotiated transactions, centralized bidding transactions, listing transactions, and base contract transfer transactions. Article 2.4.5 [Contract Decomposition Curve] According to the proportional characteristics of the decomposition curve, the contract power is completely decomposed to 24 hours a day during the contract period.

Article 2.4.6 [Trading Price] At this stage, a single contract has and only one transaction price. After the market conditions are ripe, market entities are allowed to set multiple transaction prices according to the trading period.

Article 2.4.7 [Contract provisions] Concentrated bidding and listing transactions will no longer be signed separately. The transaction results released by the power trading institution are used as the basis for settlement of the contract. Bilateral negotiation transactions will be signed through the trading platform.

Section 5 Medium- and long-term contract decomposition curve Article 2.5.1 [Contract decomposition curve] Contract decomposition curve includes two categories: custom decomposition curves and commonly used decomposition curves. The custom decomposition curve is independently proposed by market entities, decomposing the contract electricity to 24 hours of electricity, and determined through bilateral negotiation or listing transaction. Commonly used decomposition curves include annual, monthly and weekly common decomposition curves, which are formulated and published by the power trading agency and the power dispatching agency based on the load characteristics of the Shandong power grid system.

Article 2.5.2 [Common Decomposition Curve] Preparation of Basic Data of Common Decomposition Curves:

(I) Annual monthly electricity ratio (Y): The annual monthly electricity ratio is determined based on the historical data of the system power and electricity of the previous year. (II) Monthly daily electricity ratio (M): The electricity ratio for four commonly used days, working days, Saturdays, Sundays and holidays is determined based on the historical data of the system's daily electricity volume in the previous year.

(3) Commonly used daily time-sharing power curve (D) has three forms: