Provinces and cities actively promote carbon emissions trading The power industry needs to plan ahead

With the development of the economy, climate issues have attracted the attention of most countries in the world, and the climate system will become an important global governance mechanism, whether it is the United Nations Framework Convention on Climate Change adopted in 1992, the Kyoto Protocol adopted in 1997, or the Copenhagen Accord formed in 2009, which is a global action
to address climate change in the future.
The core of these agreements is to slow down the growing deterioration of the ecological environment and constrain the greenhouse gas emissions of countries around the world, especially carbon dioxide emissions
.
The economy should develop and resources should be saved, so the concept of "low-carbon development" came into being, which became the consensus of mainstream society, and the carbon trading industry developed
rapidly.

The pilot of the carbon trading market has been accelerated

The so-called carbon trading refers to the trading of carbon dioxide emission rights, that is, the carbon dioxide emission rights are treated as a commodity, and one party to the contract receives greenhouse gas emission reduction credits by paying the other party, and the buyer can use the purchased emission reduction credits to mitigate the greenhouse effect and achieve its emission reduction goals
.
Carbon trading has spawned a carbon market of more than $60 billion, with the European Union currently the world's largest and the second largest market being the Chicago Climate Exchange
.

Due to the level of economic development, stage characteristics and special national conditions, China's greenhouse gas emissions have the characteristics of
rapid growth and large magnitude.
According to statistics, in 2010, China's fossil fuel combustion emissions reached 7.
2 billion tons of carbon dioxide, accounting for about 24.
2%
of the world's total emissions.
On November 25, 2009, the executive meeting of the State Council set the action target for controlling greenhouse gas emissions in 2020: by 2020, China's GDP carbon dioxide emissions will be reduced by 40%-45% compared with 2005, and strive to achieve a non-fossil energy accounted for 15%
of primary energy consumption.
In order to achieve this goal, in November 2011, the white paper "China's Policies and Actions to Address Climate Change (2011)" proposed "gradually establishing an emissions trading market, including gradually establishing an inter-provincial carbon emission trading system"
。 In the same month, the National Development and Reform Commission also issued the Notice on Carrying out Carbon Emission Trading Pilot Work, approving seven provinces and cities in Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong and Shenzhen to carry out carbon emission trading pilot work, with the aim of establishing a total carbon emission control system for specific regions through the pilot, gradually forming a regional carbon emission trading system, and planning to establish a national carbon trading market
from 2015.

On June 18, 2013, the Shenzhen Carbon Trading Platform was launched, with 2 transactions on the same day, with 20,000 tons of carbon allowances and a total of more than 600,000 yuan
.
Shenzhen became the first city
in China to officially launch a carbon trading pilot.
At present, all pilot provinces and cities are intensively conducting pre-launch testing work, and the Guangdong government has made it clear that it will strive to complete the first phase of carbon emission allowance allocation and start carbon emission trading
by the end of 2013.
Beijing and Shanghai are expected to launch substantial corresponding trading in the carbon market this year, and carbon emissions trading is the general trend
.

Carbon trading has far-reaching implications for the power sector

The power industry is one of the most important players in the carbon trading market, and the first transaction of the Shenzhen carbon emission trading platform was participated by power companies
.
At present, China's energy consumption structure is still dominated by thermal power, thermal power accounts for about 75% and 82% of the installed power and power generation respectively, the raw coal consumed by thermal power plants accounts for more than 55% of the national coal consumption, and the carbon dioxide emitted accounts for about
40% of the national carbon emissions.

For the power sector, carbon trading is both challenging and opportunity
.

For thermal power companies with the heaviest emission reduction tasks, it will be the most
adversely affected by carbon emission rights.
According to the carbon quota allocation of the EU ETS mechanism, most thermal power plants can only be allocated 2/3 of the quota, and can only complete the task by purchasing third-party quotas, so carbon trading will inevitably increase the operating costs
of thermal power enterprises.
This is not good news
for thermal power companies that are currently living a good life due to the fall in coal prices.
However, to some extent, this will also force thermal power enterprises to accelerate the pace of structural adjustment and technological innovation, gradually eliminate small thermal power units with small capacity and high energy consumption, and vigorously develop clean and efficient coal-fired power generation technology
.

Due to China's special national conditions, carbon quotas, electricity indicators and other key elements are not determined by thermal power enterprises, thermal power enterprises can only start from improving their own operating capabilities, reducing their own carbon emission intensity, through practical measures to improve unit operation efficiency and "large pressure small" strategies, to reduce power plant power generation coal consumption, so as to better cope with the advent
of the era of carbon trading.

Carbon trading will greatly promote the development of clean energy, such as hydropower, wind power, photovoltaic power generation, nuclear power, etc.
in the process of power generation almost no carbon emissions, countries are clean energy as the core of low-carbon economic development, China also proposed to strive for non-fossil energy accounted for about 15% of primary energy consumption by 2020
.
Power generation enterprises must seize the opportunity, vigorously develop new energy industries such as nuclear power and wind power, accelerate industrial restructuring, and enhance comprehensive competitiveness
.

On the surface, power grid enterprises have little intersection with carbon trading, but in the long run, they will be affected to a certain extent, mainly as follows: first, thermal power enterprises may pass on the cost increase affected by carbon trading to power grid enterprises by increasing the feed-in tariff, thereby affecting the profits of power grid enterprises; Second, carbon trading will cause high-energy-consuming enterprises to move to low-cost areas, thereby changing the local electricity consumption situation, and then affecting the regional power supply and demand situation; Third, as energy-intensive enterprises move to low-cost areas, grid companies are forced to develop long-distance transmission technology
faster.

Power companies need to tackle carbon trading

The development of carbon trading will have a profound impact on the power industry, but are power companies ready to respond?

According to our survey, the vast majority of power companies attach great importance to international carbon emissions trading and actively participate, mainly through clean development mechanism (CDM) project trading, mainly selling carbon
.
For example, thermal power enterprises mainly in the development of CDM projects for hydropower, wind power, biomass power generation, cogeneration and natural gas power generation, and have achieved good profits by participating in international transactions; CDM projects are the main source of
income for many domestic new energy enterprises.
However, as the EU carbon trading market has gradually cooled, the carbon price has fallen from a maximum of 20 euros/ton to the current 0.
58 euros/ton (September 2013), and most CDM projects have been defaulted or terminated, which has led power companies involved in international carbon trading to focus more on the domestic market
.

The Shenzhen Carbon Emissions Exchange has not traded two transactions on the first day
.
There are many reasons for this, whether it is that carbon emission trading is still in the pilot stage, the market mechanism is not perfect, the trading model is not mature enough, or the government is compelled and the independent participation of enterprises is not enough, but the huge pressure on China's energy conservation and emission reduction will not change the objective fact
that the national unified carbon trading market is the general trend in the future.

For power companies, how to better cope with future domestic carbon emissions trading will have a significant impact
on future operations.
Where carbon trading is imperative, utilities should:

First, respond
positively.
Adapt to the new situation, raise awareness, plan ahead, actively study the internal mechanism and market rules of carbon emission trading, and prepare for
future carbon trading.

Second, strengthen cooperation
.
(1) Strengthen cooperation within power enterprises, realize the complementarity between projects with large carbon emissions and projects without carbon or low carbon (such as new energy projects), reduce the overall required quota of power enterprises, and achieve energy conservation and emission reduction; (2) Strengthen cooperation between power enterprises, exchange information on each other's achievements, learn from each other's successful experiences and lessons in carbon trading, and achieve double results with half the effort; (3) Strengthen cooperation between the power industry and other energy industries, seek common ground while reserving differences, and jointly cope with the carbon market; (4) Strengthen the cooperation between electric power enterprises and industry associations, the strength of individual enterprises is limited, through industry associations to organize decentralized enterprises, concentrate on expressing the ideas of power enterprises in carbon emission trading, and strive to tilt the quota setting, so as to turn disadvantage into advantage, not only to ensure production, but also to complete the task of
energy conservation and emission reduction.

Third, find out the family background
.
Whether it is transferring your own carbon allowances or buying other people's carbon allowances, the premise is to have a clear understanding of your own carbon allowance needs, so it is very important
to do a good inventory of your own carbon assets.
Power companies cannot wait until the assessment period for energy conservation and emission reduction to consider carbon trading
.

Fourth, reserve talent
.
Power companies should realize that a mature carbon trading market will have spot trading and futures trading, which is essentially the same as financial trading, and it is important
to do a good job in carbon trading talent reserves.
Carbon trading talents are a kind of compound talents, not only to understand industry knowledge, environmental protection policies, energy-saving technologies, but also to be familiar with the rules of the carbon trading market, but also to be proficient in financial knowledge, it is a very good idea
to train in advance.

Fifth, technological innovation
.
Low-carbon development is not just a slogan, but needs to be taken seriously, and power enterprises should be more forward-looking, vigorously introduce new technologies and new means that can promote the low-carbon development of enterprises, absorb and utilize them according to their own actual conditions, and take the road
of low-carbon development with their own characteristics.