Hainan Energy Comprehensive Reform Plan issued by the Office of the Leading Group for Promoting Comprehensive Deepening of Reform and Opening-up in Hainan

This plan is formulated to implement the Guiding Opinions of the CPC Central Committee and the State Council on Supporting Hainan to Comprehensively Deepen Reform and Opening Up (Zhongfa [2018] No. 12), effectively serve the strategic positioning of Hainan as a pilot zone for comprehensively deepening reform and opening up, a national pilot zone for ecological civilization, an international tourism consumption center, and a national major strategic service and support zone, promote the construction of the Hainan Free Trade Pilot Zone and a free trade port with Chinese characteristics, focus on the reform of the power and natural gas systems, carry out comprehensive energy reform, and formulate this plan.

I. General requirements

(I) Guiding ideology. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the decisions and arrangements of the CPC Central Committee and the State Council to support Hainan in comprehensively deepening reform and opening up, implement the new energy security strategy of "four revolutions and one cooperation", based on Hainan's location characteristics and energy resource endowment, leverage the policy advantages of higher-level opening up, implement comprehensive energy reform according to local conditions, expand the breadth and depth of power and oil and gas reforms, focus on optimizing the energy supply system, promote energy consumption upgrades, improve the energy market system, innovate the energy management system, promote energy technology innovation, strengthen international energy cooperation, promote Hainan to take the lead in forming an energy revolution demonstration zone, and effectively help Hainan comprehensively deepen reform and opening up with high-quality energy development.

(II) Main objectives. Focus on developing clean energy and building Hainan Clean Energy Island. By 2025, Hainan's clean, low-carbon, safe and efficient energy system will be initially established, the energy structure will be significantly improved, and the proportion of clean energy in primary energy consumption will reach about 50%; the digitalization and intelligence of the energy system will continue to improve; an open and competitive energy market system will be initially established; the level of energy governance will be significantly improved; and Hainan Clean Energy Island will take shape. By 2035, Hainan's clean, low-carbon, safe and efficient energy system will be more mature, and the clean energy transformation will be basically realized; a low-carbon, digitalized smart energy ecosystem will be basically formed; a unified, open, competitive and orderly energy market system will be more mature; a modern energy governance system will be increasingly sound; and Hainan Clean Energy Island will be basically completed.

2. Optimize the energy supply system

(III) Promote the implementation of comprehensive energy resource planning. Coordinate various resources on the supply side and demand side, formulate and implement comprehensive energy resource planning, promote the coordinated optimization of resources on the supply side and demand side, and improve the efficiency of energy resource allocation.

(IV) Innovate energy production mechanisms. Innovate the way to determine the owners of energy investment projects, and determine the owners of energy projects such as natural gas exploration and development, natural gas power generation, renewable energy power generation, energy storage power stations, oil and gas pipelines, and power grids in a market-oriented manner. Develop nuclear power safely and efficiently, innovatively implement the Hainan Changjiang Nuclear Power Phase II project, and actively promote the construction of multifunctional and small-scale nuclear energy comprehensive utilization projects. Support the construction of marine energy projects in island areas. Encourage the construction of comprehensive energy projects that coordinate and complement multiple energy sources such as electricity, heat, cold, and gas, and promote the integrated development of natural gas and electricity. Study and establish a green power licensing system, and encourage the use of resources such as hotels, residences, and factories to build distributed photovoltaic power generation on the premise of complying with national land space planning. Promote the green and low-carbon development of offshore wind power, photovoltaics, marine energy, and their combination with characteristic industries such as marine agriculture, animal husbandry, and tourism.

(V) Strengthen oil and gas supply security. Implement the policy of opening up the oil and gas exploration and exploitation market, and clarify the access standards and qualifications. Promote the facilitation of investment in oil and gas storage and transportation facilities, and actively promote foreign-funded enterprises to build oil storage facilities in the form of wholly-owned or joint ventures. In accordance with the requirements for the construction of the natural gas production, supply, storage and marketing system, all types of capital are encouraged to participate in the investment and construction of LNG receiving stations and gas storage facilities.

(VI) Improve energy infrastructure. Support the integrated development of source, grid, load and storage. Support the construction of energy-using facilities such as gas replacing diesel (coal) and electricity replacing diesel (coal). Coordinate the planning and construction of energy infrastructure such as power grids, oil and gas pipelines, charging, and refueling, and urban integrated pipelines. Support the creation of a comprehensive demonstration province for smart grids, accelerate the upgrading and transformation of power grids, and promote the development of smart grids.

III. Guide clean energy consumption

(VII) Promote energy conservation and emission reduction. Study the establishment of Hainan Energy Efficiency Fund through government and other institutions to promote energy conservation and emission reduction. Explore the establishment of an energy efficiency rating system, and encourage users to strengthen energy efficiency management through energy efficiency rating certification and other means. Encourage the use of market-oriented means such as contract energy management to promote building energy conservation and renovation, strengthen the constraints of energy-saving standards for new buildings, and promote the construction of green buildings and green ecological communities. Strengthen the clean and efficient use of coal, and strengthen the in-depth treatment and control of coal combustion pollution. Encourage innovation in the mechanism for absorbing renewable energy power, improve the green power consumption certification mechanism, and encourage users to consume green electricity.

(VIII) Promote the transformation of rural energy use. Encourage the use of distributed energy to meet the comprehensive energy demand of agriculture and rural areas, and encourage rural users to build distributed energy systems as producers and sellers. Accelerate the establishment of a long-term mechanism for clean and efficient energy use that meets rural revitalization in accordance with local conditions, promote the use of gas instead of firewood, electricity instead of firewood, and biomass molded fuel instead of firewood, promote biomass power generation, and promote the transformation of energy use in agriculture and rural areas. Attract social capital to combine the development of rural tourism and green agriculture, participate fairly and accelerate the investment and construction of energy infrastructure such as rural power grids, and promote rural industrial revitalization and ecological revitalization.

(IX) Fully tap user-side resources. Support user-side energy storage, virtual power plants and other resources to participate in market-based transactions and enjoy the same income rights as general power generation companies. Fully implement electricity meter reading to households, and create conditions for various users to participate in the electricity market and implement flexible price mechanisms.

(X) Promote clean energy substitution. Strengthen policy guidance and incentives, promote the construction of new energy and clean energy supply systems for vehicles and ships, and accelerate the increase in the proportion of new energy and clean energy utilization in port operation machinery and vehicles. Vigorously promote electric energy substitution, accelerate the popularization of electric vehicles, and vigorously promote the use of shore power by ships at ports.

IV. Improve the energy market system

(XI) Expand the breadth and depth of energy system reform. Support Hainan in carrying out pilot reforms of mixed ownership of distribution networks in some areas where power supply facilities are weak and investment in distribution networks is urgently needed, while improving the reform of incremental distribution. Actively explore the creation of a smart energy ecosystem around distribution companies. Establish a deep integration mechanism for basic energy services such as power supply, oil supply, and gas supply to promote comprehensive energy services. On the basis of fulfilling the safety responsibilities of all parties, realize information sharing and coordination of regulation and control business such as electricity, oil and gas, and gradually form an energy integrated hub with functions such as energy system operation and data integration.

(XII) Establish an open and competitive electricity market system. Improve the medium- and long-term electricity trading mechanism and expand the scale of transactions. Build an electricity spot market that conforms to Hainan's reality and connects with the southern regional market. Establish a market-oriented price formation and sharing mechanism for power auxiliary services, encourage market players to invest in the construction of peak-shaving power sources such as pumped storage, and promote various market players to actively participate in system regulation. Promote Hainan's inclusion in the national unified power market system, and support market players to absorb clean energy from other provinces through cross-provincial market-based transactions.

(XIII) Improve the energy price formation mechanism. Strengthen price supervision of natural monopoly links in electricity, oil and gas, and explore incentive-based energy transmission and distribution price determination mechanisms. Study and establish a price mechanism that takes into account differentiated needs such as user reliability. Establish a market-based guidance mechanism for upstream and downstream prices of natural gas power generation. Improve the market-based energy price mechanism, accelerate the liberalization of commercial power users to participate in the market, and gradually liberalize non-residential natural gas prices. Under the premise of ensuring universal energy services for low-income people, explore the establishment of a flexible residential energy price mechanism, properly handle and gradually reduce cross-subsidies.

(XIV) Cultivate diversified energy market players. Fairly open to all types of capital in the fields of natural gas and electricity, and relax market access. Promote the non-discriminatory and fair opening of oil and gas pipelines and power grids to third parties.

V. Innovate energy management mechanisms

(XV) Give Hainan more autonomy in energy management. Support Hainan to carry out practical exploration in energy planning, pricing, project investment and other aspects in light of its strategic positioning and resource endowment, and give Hainan's provincial government more autonomy in energy prices, energy projects and other aspects. Support Hainan to learn from international experience and explore energy price mechanisms such as electricity and natural gas that are compatible with Hainan's clean energy development.

(XVI) Optimize energy management. Improve the energy regulatory system and mechanism, and establish a national and local coordinated supervision and joint law enforcement mechanism. Deepen the "delegation, regulation and service" reform, realize the "one window" handling of energy management and services, vigorously promote electronic services, and realize "one network for all". Implement the notification and commitment system for power business licenses and power facility installation (repair, test) licenses. Strengthen the energy planning, construction, management and service functions of municipal and county governments.

(XVII) Improve energy laws and regulations. Support Hainan to accelerate the formulation of local policies and regulations in the energy field in accordance with the "Foreign Investment Law", "Regulations on the Implementation of the Foreign Investment Law", "Special Management Measures for Foreign Investment Access (Negative List) (2019 Edition)" and other laws and regulations in light of actual conditions, improve relevant standards and specifications in the energy field, and provide institutional guarantees for comprehensive energy reforms.

VI. Promote energy technology innovation

(XVIII) Promote the digital transformation of energy. Take the market as the leading factor to stimulate the technological innovation of energy enterprises. Support the construction of Hainan Energy Cloud Platform, integrate basic energy data information such as electricity, oil and gas, build an energy integrated data center, support the integration, sharing and application of energy big data, and realize the digital transformation of the energy system. Accelerate the integration and application of technologies such as big data, artificial intelligence, Internet of Things, 5G, blockchain, etc. in the energy field, support the development of new models and new formats in the energy industry, and create a smart energy ecosystem.

(XIX) Strengthen energy science and technology innovation. Actively promote the cross-integration and innovation of energy and other fields. Support Hainan to introduce domestic and foreign universities and research institutions to carry out research on new energy technologies. Encourage all kinds of domestic and foreign enterprises to set up energy technology research and development centers in Hainan. Strengthen the construction of major energy science and technology research and development bases, and build a marine energy research center under the overall layout of the construction of national science and technology innovation bases. Strengthen the research and development and application of energy technologies such as hydrogen energy, energy storage, and natural gas hydrate mining.

VII. Strengthen international and regional energy cooperation

(XX) Carry out energy technology training and exchanges. Adhere to all-round opening up to the outside world and actively introduce foreign investment, international advanced technology and management experience. Support international organizations to build clean energy technology promotion centers in Hainan, and carry out clean energy technology training and exchanges for developing countries such as Southeast Asia. Set up smart energy-related international forums in Boao and other places to create international exchange brands in the energy field.

(XXI) Support participation in Hainan's energy investment and construction. Support international, Hong Kong, Macao and Taiwan enterprises to participate in Hainan's energy investment and construction, and provide a variety of energy products and services that meet the needs of Hainan's clean energy island.

VIII. Guarantee measures

(XXII) Strengthen organization and implementation. In accordance with the requirements of this plan, Hainan Province shall formulate specific measures based on actual conditions, clarify timetables and roadmaps, give full play to the role of municipal and county governments, and promote the implementation of comprehensive energy reform. The National Development and Reform Commission and the National Energy Administration will work with relevant departments to strengthen guidance and support for Hainan's comprehensive energy reform, strengthen communication and cooperation, strengthen energy coordination supervision, coordinate and solve difficulties and problems arising in the reform process, and report major matters to the Leading Group for Promoting Comprehensive Deepening of Reform and Opening Up in Hainan in accordance with procedures.

(XXIII) Strengthen legal guarantees. All energy comprehensive reform policies and measures proposed in this plan that involve adjustments to current laws and administrative regulations shall be implemented after unified authorization by the National People's Congress and its Standing Committee or the State Council.

(XXIV) Strengthen publicity and guidance. Strengthen news publicity and policy interpretation, promote the formation of social consensus, and promote the smooth implementation of energy reform. Improve the public participation mechanism, strengthen information disclosure, widely listen to opinions and suggestions from all sectors of society, guide the public to participate in the entire process of energy reform implementation, and create a good atmosphere for the whole society to jointly promote Hainan's comprehensive energy reform.