Since late September 2021, the phenomenon of “switching power cuts” that has spread to many provinces has been on hot searches for many times, and has attracted great attention from the society.

In general, the reasons for the current round of "turning off the power limit" are not complicated, and there are two main reasons. The first is to sprint energy consumption "dual control" policy goals. The “dual control” policy of energy consumption means that the central government sets targets for total energy consumption and energy intensity control for provinces, autonomous regions, and municipalities directly under the Central Government, thereby supervising and assessing local governments at all levels to achieve the goal of energy conservation. The “dual control” of energy consumption was first proposed at the Fifth Plenary Session of the 18th Central Committee in 2015 and has now become a key assessment indicator for China to achieve energy conservation and emission reduction. In order to sprint energy consumption "dual control" goals, some provinces have adopted extreme measures of "complementary work" of power and production restrictions. The second is the contradiction between power supply and demand. Power shortage is also the main reason for the current round of power rationing in many places. For example, the Northeast region has not faced great pressure on the assessment of "dual control" of energy consumption, and the contradiction between power supply and demand is the key crux behind the power curtailment in such regions. Since the first half of 2021, the prices of some coal varieties have risen sharply, and power supply and demand gaps have appeared in some regions. In addition, China's economy was the first to recover during the epidemic, prompting a large-scale return of foreign trade orders, and driving domestic electricity demand to rebound rapidly in the short term.

In order to alleviate the contradiction between power supply and demand, relevant state departments and industries have issued policies and deployment measures in a timely manner, and the tight supply of some products in the coal market will be alleviated. In response to the first reason mentioned above, in fact, as early as July 2021, the central government clearly put forward the corrective campaign-style "carbon reduction" requirements for signs of "overheating" carbon emission reduction in various regions, reflecting the far-sighted top-level design. However, when the market-oriented energy-saving and emission-reduction mechanism is not sound, the administrative instructions have not achieved the expected policy effects. Therefore, in order to effectively prevent the occurrence of "switching on the power limit", it is urgent to deepen the reform of the energy-saving and emission-reduction system and mechanism. Specifically, we can start from the following aspects:

One is to establish the goal of "dual control" of energy consumption on the basis of renewable energy, and appropriately improve the management flexibility of local governments. The ultimate goal of restricting energy consumption is to reduce pollution and carbon emissions. Renewable energy has the clean characteristics of low pollution and low emissions. It is recommended that when checking energy consumption constraints in various regions, renewable energy consumption can be deducted first to actively guide the sustainable development of renewable energy and minimize the distortion of the economy caused by energy-saving policies.

The second is to comprehensively promote the reform of the electricity market and give full play to the fundamental role of the market mechanism in the discovery and transmission of electricity prices. At present, the electricity price formation mechanism has not been straightened out, and the spot market mechanism is still in the pilot stage. Currently, only some industrial and commercial users participate in electricity market transactions. Therefore, it is necessary to further improve the construction of the power trading center and gradually expand the coverage of the market-based pricing mechanism. For residents' electricity, improve the residents' tiered electricity price system, gradually eliminate electricity price cross subsidies, so that electricity prices can better reflect the cost of power supply, and guide residents to form energy-saving and low-carbon consumption concepts.

Third, on the basis of giving full play to the leading role of administrative power, an energy supply system with free competition for all types of energy will be formed. It should be recognized that coal is still China's main energy source and the "ballast stone" for the safe and stable supply of energy. Therefore, it is not appropriate to "demonize" coal and excessively suppress coal production capacity. In accordance with the green and low-carbon development direction, the goal of achieving carbon peak and carbon neutrality through benchmarking, based on the national conditions, controlling the total amount, keeping the bottom line, orderly reducing and replacing, and promoting the transformation and upgrading of coal consumption. Government departments can reduce the green premium caused by the cost gap between new energy and traditional energy through various fiscal and tax policies, thereby guiding the low-carbon transition of the energy structure, so that the survival of the fittest among different energy sources can be determined by the market mechanism. Editor/Sang Xiaomei