CCSN Power: Resistance to natural gas power generation

The primary factor hindering the development of the natural gas power generation industry is the high cost of fuel for power generation, which has a greater impact on the main business income.

Taking a typical 9F gas-fired unit as an example, the total power generation cost is 0.659 RMB/kWh. In contrast, the total cost of generating electricity from a 600MW coal-fired unit is 0.385 RMB/kWh.

Among them, the fuel cost of gas-fired units accounted for 81.79% of the total cost; the fuel cost of coal-fired units accounted for 63.64% of the total cost.

Reflected in electricity prices, natural gas power generation does not have an advantage. The benchmark electricity price for natural gas power generation is 0.665 RMB/kWh, and the benchmark electricity price for coal-fired power generation is 0.453 RMB/kWh.

In addition, the current base electricity for natural gas power generation is reduced, and the utilization hours are obtained by market competition, which further exacerbates the difficulty of gas power generation.

The base amount of electricity refers to the on-grid power generation corresponding to the price approved by the national price authority.

Taking Guangdong as an example, in 2015, the base amount of natural gas power generation was 391.3 billion kWh, and in 2018, it decreased to 242 billion tons, a drop of nearly 40%.

At the same time, the market competition for electricity has increased significantly, from 42 billion kWh in 2016 to 160 billion kWh in 2018, an increase of 2.8 times. It is estimated that in 2020, Guangdong's natural gas power generation base will account for less than one-third of the electricity.

The environmental value of natural gas power generation itself also faces the challenge of ultra-low emissions from coal-fired units.

The Action Plan for Upgrading and Renovation of Coal Power Energy Conservation and Emission Reduction (2014-2020) issued in 2014 requires that the emission of major air pollutants from coal-fired units should be greatly reduced through multi-pollution and efficient coordinated control technology.

According to the data, coal-fired units meet the emission standards of gas turbines through technical means, and the cost has only increased by 0.016 RMB/kWh, which to a certain extent has weakened the competitive advantage of gas-fired units in environmental protection.

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Posted by: Zhang Jianlong

Reviewed and translated by: Kailon Chung