AN INNOVATION RESEARCH OF MAKING PRICE MODE FOR CHINA PUMPED STORAGE POWER PLANT

Transcription

1 AN INNOVATION RESEARCH OF MAKING PRICE MODE FOR CHINA PUMPED STORAGE POWER PLANT Shu Liang LIU 1, Feng Wu HAN 2 1. School of Business Administration, North China Electric Power Univ., Baoding, China. 2. School of Business Administration, North China Electric Power Univ., Baoding, China. Abstract: According to the analysis of existing making price mode for china pumped storage power plant, the existing making price modes are not suitable for the requirement of market competition with electric power market innovation goes into deep and the implement of price bidding of electric power market. It is very necessary for exploring a new making price mode on pumped storage power plant under the new situation. So a new making price mode is put forward, which divides the total incomes into two parts, one is fixation on the static effects, the other dynamically tunes with the dynamic effects. So the new making price mode solves the problems of the making price and management of the pumped storage power plant. Of course it considers benefits of the electric wire netting companies and power plants. It may be a good direction for the survival pumped storage power plants in a market environment. Keywords: innovation; making price mode; pumped storage power plant 1 Introduction Pumped storage power plants are not only a power plant, but also a managed tool. Their developing mechanism and making price mode are diversification. They can be invested and managed by electric wire netting companies (Guangdong Province) or thermal power plants (Shandong Province), so they can pare the peak and fill out the valley. The pumped-storage station is a sound electrical source, which has the abilities of peak regulation, frequency modulation, phase modulation and emergency generation, in power grid. At the same time, it can implement the functions of frequency modulation, phase modulation and emergency reserve and improve power grid reliability. From the actuality, till June of 2002, in China, eleven pumped storage power plants have been built in nine provinces and installed capacity is about 5,700,000kw and accounts 1.8% of the proportion of the national installation (He 2004) volumes. There are four large plants, which are Guangdong (2,400,000kw), Zhejiang (1,800,000kw), Beijing Shisanling (800,000kw) and Hebei Panjiakou (270,000kw). There are five middle plants which are distributed in Jiangsu province, Zhejiang province, Anhui province, Hubei province, Xizang city. Now there is a project which is building in Taian (1,000,000kw) in Shandong province. And there are some plants whose projects recommendations have been passed and will be built in succession in the future, such as Tonga (1,200,000kw) power station in Zhejiang province, Xilongchi power station (1,200,000kw) in Shanxi province, Yixin (1,000,000kw) in Jiangsu province, Zhanghewan (1,000,000kw) in Hebei province and Langyashang (600,000kw) in Anhui province. The plants will be built in the Tenth Five-Year Plan and the Eleventh Five-Year Plan. On the occasion, the scale of the transmission of electricity from west to east will be larger, and all electric wire nettings have greater distances between peaks and valleys. But for Scobey area and Lassa area, hydro power plants capacity (including pumped storage power plants) is 3%~7% of the electric wire netting total capacities. They are hard to satisfy the requirements of adjusting the peaks and backs for the urgent accidents. So it is very necessary to accelerate the builds of pumped storage power plants in East China and Central China. Now there is not a mature making price mode for the building pumped storage power plants. A new making price mode is put forward, which divides the total incomes into two parts, one is fixation on the static effect, the other dynamically tunes with the dynamic effect. The making price mode of the pumped-storage station should be consistent with the national concerned laws and regulations and industrial policy. And the beneficiaries of the pumped-storage station are part of the society and should pay money corresponding benefits. When the principle is applied, two points are very important. One is that fee charging item should be directly related to the beneficiaries. The other is that fee

2 charging quantum should equal or less than the benefits. At the same time, The operating of the pumped-storage station can better arrange the social resources as a whole and save energy, so lots of exterior benefits are produced. The exterior benefits are hard to quantify by currency according their benefits, but they are needed by the society. The management mode of the pumped-storage station should consider its social benefits and exterior ones and some favor policy must be given. At last, the benefits of the company must equal or more than the cost as a lowest limitation as a general rule. Now the peak-valley electricity price variance in China is not enough large to make the pumped-storage station to survive independently in power market. If there is not favor policy which makes the pumped-storage station get more benefits than the cost, its operating and development will be blocked at last. So the principle must be carried out. 2 Main Functions and Present Making Price Modes of Pumped Storage Power Plants The most direct functions are for power grid enterprises and thermal power stations (such as figure 1). Figure 1 the pumped-storage station function and benefits 2.1 Main functions of pumped storage power plants Firstly, they can pare the peak and fill out the valley. Pumped storage power plant can pare the peak and fill out the valley in electric wire netting and divide the pressure of adjusting the peaks (Aoki 1988). When it is at lower load time in power grid, the pumped-storage station will start water pumps and then pumps becomes the load of power grid. At the same time, thermal power stations are running inefficiently. So the load produced by the pumped-storage station can advance thermal power units running efficiency. Secondly, they can pear the frequency modulation and backs for the urgent accidents. Units of pumped storage power plants can be started very quickly and can bear exertions of the urgent accidents. The pumped-storage station can participate in frequency modulation, phase modulation and generation for emergency according to the requirement of power grid. So it is a guarantee for the safety and reliability of power grid. At the same time, the quality of electricity is also been advanced. Thirdly, pumped storage power plants can participate in frequency modulation and phase modulation in the electric wire netting. Those functions are called static functions when pumped storage power plants are ready to run. When they are running these functions are called dynamical functions (Moitre 1999). So their benefits are called separately static benefits and dynamic benefits.

3 2.2 Present making price modes of pumped storage power plants Under monopoly management condition, power grid company and generation companies are subjected to the common owner and the benefits came from the pumped-storage station are left in power industry. So it is not important to divide who is the beneficiary. In this situation, traditional pumped-storage station takes three kinds management modes. There are three main making price modes at home and abroad. The first is the mode of electric wire netting unification management. Pumped storage power plants are managed by electric wire netting companies, such as their costs, interest for the repayment of capital, profits, taxes and functions checks (Chen 1998). The second is leasing making price mode. Pumped storage power plants are leased by electric wire netting companies or other kings of companies. The mode is general at abroad. The third is the mode of independent management. Pumped storage power plants participate in the contest in the market as an independent company (Won 1999). Those modes have some problems for the pumped storage power plants at the present stage. First is that pumped storage plants cannot run as a independent company because of lacking of the enough price distance between the peak and valley. Second is that property right of a plant is mastered by all kinds of companies, so it hard to be unified managed by electric wire netting companies. Third is that it is very hard to imply that plants are completely leased by other companies. So a new making price mode is put forward, which divides the total incomes into two parts, one is fixation from the static effects, the other dynamically tune with the dynamic effects. That means the income of a pumped storage power plant composed of three parts. One is for paring peaks. Second is for valley pumped water load sales to generation power groups. Third is for increased prices in electric wire netting. For the explaining the mode, these contents are introduced: the profit is for paring peaks; the profit is for valley pumped water load sales; the profit is for increased up-net electric price; investment variety, the scheme of pumped water load sales, the making price mode and the foreground are analyzed. 3 The Operation Cost Calculation of a Pumped Storage Power Plant (Such As C Company) Yea r Table 1 All kinds of costs calculation results (exertion coefficient 100%) Fixed cost Variable cost Total cost (ten Various Returnin Investme kinds of g of the nt return tax capital Depreciati on return loan Total cost

4 Its normal operation cost has fixed cost, variable cost, various kinds of tax, returning of the capital, investment return, depreciation return loan (every data of exertion coefficient as 100%): Fixed cost ten Yuan Variable cost ten Yuan Various kinds of tax ten Yuan Returning of the capital ten Yuan Investment return (10% of the self capital), ten Yuan Depreciation return loan (return loan according to the contract), /year ten Yuan 4 Pumped Storage Power Plant Incomes 4.1 The pumped storage power plant generating electricity income The pumped storage power plant generating electricity income (GEI) equals the electricity amount of transferring to electric wire netting (EATEWN) multiply the up-net electric price (): GEI = EATEWN * (1) Table 2 is calculation results (exertion coefficient 100%): Table 2 The pumped storage power plant generating electricity income (exertion coefficient 100%) Planed EATEWN (ten Kwh) Exertion coefficient Actually EATEWN(ten Kwh) GEI (ten % The income comes from up net price of the pumped storage power plant The calculation results are static benefits of the pumped storage power plant. But when a pumped storage power plant runs in an electric wire netting, it can participate in the frequency modulation, phase modulation and generation electricity of urgent accidents (M 1996). It can make the electric wire netting more stable and let power sources have better quality. So it creates benefits called dynamical benefits. Compan y Year CBL (ten Table 3 The up net price (exertion coefficient 100%) A Com. B Com. C Com. D Com. CBL (ten / Kwh) CBL(ten CBL(ten Dynamical benefits are assistant services in electric power market (R 1998). At present stage, a competitive

5 price of electric power in China has not implied. So how to decide the price of the generating electricity of pumped storage power plants are lack of enough reasons. This is a problem of pumped storage power plants. It is supposed to increase properly their price in the electric wire netting to compensate their dynamic benefits. And all power plants have different up the net prices, so their have different cost to buy pumped storage power plants load. Their prices are calculated by next formula. The cost of buying load = PTB + EATEWN (basic price is 0.600Yuan C Company (exertion coefficient 100%) The cost of buying load (CBL): = According to the exertion coefficient 100%, every company has itself cost of buying-load., the table 3 is results. 5 The Profits Got by Thermal Power Plants Through buying the valley pumped water load of the pumped storage power plant, they can generate more electricity and get more profits after thermal power plants buy the valley pumped water load. They use 60% of the increased income to buy the valley load of the pumped storage power plant (Zhao 2001). So the thermal power plants net income equals that increased income minuses generating electricity cost and then add the account of the saving coals because of the increased efficiency of the unit in thermal power plants by increased generating electricity (Chen 1998). Its calculation formula is: PTB is the price of the thermal power pants buying the valley pumped water load. PPINP is the proportion PTB/the thermal power plants increased net profit. CCPK is that how much grammars standard coal will be cost to generate one Kwh. PKSC is the price of one kilogram standard coal. SCC is how much money would be saved when thermal power plants increase their generating electricity and they can decrease the cost per Kwh. PTB PPINP [ EATEWN (EATEWN CCPK PKSC)/0.9 SCC] C Company exertion coefficient 100%: PTB: =0.6 [ ( )/ ] Table 4 is the calculation results: Table 4 The PTBs of three companies (exertion coefficient 100%) Compa ny PTB (ten PPIN P Actually EATEWN (ten Kwh) CCPK (g PKSC /1000kg ) SCC (ten thousan d A Com B Com C Com D Com According to the table 5, D Company is most suitable. It has high and low load rate. It can completely satisfy the need the pumped storage power plant. And C Company also satisfies the need the pumped storage power plant. But B Company and A Company cannot satisfy enough electricity for the pumped storage power plant. Their more detail analysis can be found in tab.5. Note: (1) 0.9 is the proportion between coal cost and total cost and comes from statistic. (2) Different companies have different CCPK and. The data comes from some province electric wire netting large units tables (the 8th of September, 2004) and some electric wire netting 2003 generating daily report and some province electric power industry statistic data compilation (2003).

6 Table 5 The units (>100,000kw) of four companies generation electricity information (2003) Company A Com. B Com. C Com. D Com. capacities of units (ten Kwh) generation electricity (ten Kwh) using hours(hour) power supply standard coal cost rate (g plant consumption rate(%) Adjustable exertion load rate The using rare of the units capacities The extra affordable Capacities (ten Kwh) the pumped storage power plants needs the most largest load (ten Kwh) 6 Conclusion The new making price mode which divides the total incomes into two parts, one is fixation from the static benefits, the other dynamically tune with the dynamic benefits has its theory base and rationality in economics. C Company is a very good example to testify the new mode. At the same time, it has a simple operation and can also let the pumped storage power plants and thermal power plants both get profits. It can be implied easily. Its increased price does not exceed the peaks and valley prices catalog local government made. So it is not hard to get the policy of the prices compensation. In recent years, the prices distance between peaks and valley has become more and more large. So phenomenon of adjustment the peaks and pressing the loads would be more seriously. It creates conditions of long time operations of pumped storage power plants. With the electric power market innovation goes into deep and implements of price bidding of the electric power market, assistant services of pumped power station would go in the market for trading. So it will make the account of dynamical benefits becomes possible. References Aoki K, Fan M, and Nishikori A (1988). Optimal VAR planning by approxi-mation method for recursive mixed-integer linear programming, IEEE Transon Power Systems, 3(4), Chen S, and Lipo T A. (1998). Bearing currents and shaft voltages of an induction motor under hard- and soft-switching inverter excitation[j], IEEE Trans on Industry Applications, 34(5): Chen Yu, (1998). Tutorial of information economics, Tsinghua University Press(China), 88~101. He Yong-xiu, Guan Lei, Ai Qi, Liu Xiao-li, and Li Cheng-ren (2004). Analysis of securing function and economic benefit of pumped storage station in power gird, Power System Technology, 28(20), Moitre D.(1999). Economic dispatch of a electric energy system: an evolutionary approach[c]. ISAP'99, Riode Janeiro(Brazil), M. Fiotuhi-Firuzabad, R. Billinton, and S. Aborehaid. (1996), Spinging reserve allocation using response health analysis, IEE Proc. Gener. Transm. Distrib, 143(4), R. N. Allan, R. Li, and M. M. Elkateb (1998). Modeling of pumped storage generation in sequential Monte Carto production simulation, IEEE Proc. Gener. Trantim. Distrib, Won JR, (1999). Economic dispatch solution using an improved ge-netic algorithm[c], ISAP'99, RiodeJaneiro (Brazil), Zhao Jianfeng, Jiang Ping, and Tang Guoqing (2001). Study of interaction between power system and VSI based series power quality compensator[j], Proceedings of the CSEE, 21(4):