Further promoting the "three reform linkage" of coal and electricity is a crucial measure to ensure national energy security and fully utilize the role of energy as a "ballast stone". Statistics indicate that in the first two years of the "14th Five-Year Plan", the total scale of coal power transformation under the "three reform linkage" exceeded 485 million kilowatts, achieving approximately 81%
Further promoting the "three reform linkage" of coal and electricity is a crucial measure to ensure national energy security and fully utilize the role of energy as a "ballast stone". Statistics indicate that in the first two years of the "14th Five-Year Plan", the total scale of coal power transformation under the "three reform linkage" exceeded 485 million kilowatts, achieving approximately 81% of the target set for the "14th Five-Year Plan". This includes 152 million kilowatts for energy saving and carbon reduction transformation, 188 million kilowatts for flexibility transformation, and 145 million kilowatts for heating transformation. As per the plan, throughout the entire period of the "14th Five-Year Plan", there will be continued promotion of the "three reform linkage" between coal and electricity, with a total transformation scale reaching about 600 million kilowatts.
In line with goal requirements, local planning and enterprise actions have made the "three reforms linkage" a focal point. Many regions have proposed rational arrangements for supportive and regulatory clean coal power construction while orderly advancing coal power's "three reforms," all aimed at ensuring energy supply security.
The current achievements in transformation are commendable, but it is also important to recognize the typical problems that have emerged during the early stages of transformation and actively seek solutions to address these issues. Among them, the economic challenge has always been a significant constraint and a major bottleneck.
Some estimates indicate that the total capital required for the "three reforms linkage" during the "14th Five-Year Plan" period exceeds 120 billion yuan. For example, in flexible transformation, the investment per kilowatt ranges from 50 to 200 yuan, with tens of millions of yuan needed for the transformation of a 300,000-kilowatt unit. In some cases, coal power enterprises may need to carry out multiple reforms, requiring hundreds of millions in capital investment.
Following the transformation of coal power units, there is often prolonged and intensive involvement as well as frequent peak loads which increase the risk of equipment aging and early failure. This subsequently leads to an increase in operational and maintenance costs for these units. In other words, there is often an imbalance between economic investment and return on investment from these transformations which can lead to a lack of motivation within enterprises themselves.
At the same time, the benefits brought by the renovation are also uncertain. For example, in terms of energy-saving transformation, most of the low-cost and effective projects have been completed. However, many remaining projects present significant challenges and require substantial investment, making it difficult to determine the return on investment. Similarly, flexibility transformation poses its own challenges as reducing unit load operation directly impacts power generation income. Additionally, underdeveloped auxiliary service market results in insufficient electricity service and auxiliary service income to cover unit costs. Furthermore, peak regulation benefits are contingent upon power grid demand and timing; if peak regulation time is less than expected, this can result in lower-than-anticipated benefits.
To enhance enterprise participation in these transformations, it is crucial to improve economic incentives through policy measures and market mechanisms. The state has already issued relevant policies and implemented special financial support to alleviate enterprise transformation costs by improving the auxiliary service market. However, fundamental economic issues persist. To ensure successful completion of transformation plans at a local level requires strengthened planning guidance that leverages market mechanisms and optimizes technical routes based on regional thermal power units' situations and power systems. This will facilitate the development of reasonable transformation plans and roadmaps while promoting effective realization of goals related to 'three reform linkage.' Ultimately, this approach provides a strong guarantee for constructing a clean, low-carbon, stable power system.