As the wholesale and retail price difference gradually narrows, it is difficult for electricity sales companies to survive solely on wholesale and retail price differences, and they need to rely on refined customer curve management and value-added services, "the Jiangsu regional head of a national electricity sales company told reporters. She has been deeply involved in the high energy consumption and energy industry for many years.

Previously, she was only responsible for selling electricity and relied on the wholesale and retail price differences in the electricity market to generate profits. As the signing season for the 2027 electricity sales business approaches, her company is gradually expanding its value-added services, including transformer maintenance, virtual power plants, energy storage, and photovoltaic related businesses.

This year, the profit margins of some regional electricity sales companies have significantly narrowed. According to the "2026 Guangdong Electricity Market Half Year Report" released by the Guangdong Electric Power Trading Center, in the first half of this year, among the 500 electricity sales companies participating in retail transactions in Guangdong Province, 298 have accumulated losses, with a loss rate of 59.6%. The industry average profit per kilowatt hour is 0.0039 yuan, or 3.9 cents per kilowatt hour.

The profitability of different types of electricity sales companies also varies. The average profit per kilowatt hour of 32 power generation and sales companies is about 0.0066 yuan; 456 independent electricity sales companies, accounting for over 90% of the total, have an average profit of approximately 0.0002 yuan/kWh per kilowatt hour. By 2025, out of 412 electricity sales companies in Guangdong Province, 396 will be profitable, with an average profit of approximately 0.0196 yuan/kWh per kilowatt hour.

Related policies are also being adjusted gradually. On September 4th of this year, the National Development and Reform Commission publicly solicited opinions on the "Management Measures for Electricity Sales Companies (Draft for Public Solicitation of Comments)" (hereinafter referred to as the "Draft for Comments"), and the deadline for soliciting opinions was October 4th. On June 8th of this year, the National Development and Reform Commission and the National Energy Administration issued a notice on strengthening the management of the electricity retail market. Both documents put forward new requirements for the rules of the electricity trading market and the operational norms of electricity sales companies.

Cai Yuanji, Executive Deputy Director of the Power Market Institute of Tsinghua Sichuan Energy Internet Research Institute, said to the Economic Observer that after a long period of operation, the power retail market has exposed some problems in succession. The adjustment of relevant systems will enable the retail market to fully assume the function of user service and demand regulation, and promote the power sales competition to pay more attention to professional ability and performance quality.

Integrated Energy Services

The aforementioned person in charge told reporters that she is no longer engaged in a single electricity sales business, but in "comprehensive energy management".

She said that the underlying logic of "integrated energy management" and electricity sales business is to help customers manage electricity. However, at the execution level, the electricity sales business relies on electricity trading, data, and algorithms, while transformer maintenance, power operation and maintenance, and other businesses require corresponding qualifications, skills, and personnel.

In her opinion, if only conducting electricity sales business, there will be many similar entities in the market, and homogeneous competition will be severe. Some electricity sales companies mainly rely on "relationships" or "rebates" to win customers. The "rebate" she referred to refers to the additional benefits promised by the electricity sales company to customers beyond the settlement in the electricity market.

According to Cai Yuanji, the policy clearly supports power sales companies to carry out comprehensive energy services such as green energy, energy efficiency management, and distributed energy operation and maintenance, promoting the transformation of power sales companies from "price arbitrage" to "service value-added".

The aforementioned person in charge stated that it is difficult for a single electricity sales company to provide comprehensive energy services. Her company mainly relies on inter enterprise cooperation to jointly provide services to customers.

She stated that the current competition in the electricity sales market still revolves around winning customers and lowering prices. Even if some electricity sales companies intend to provide comprehensive energy services, they are often snatched away by peers who promise higher "rebates".

The draft proposes that electricity trading institutions should disclose information on a monthly basis regarding the settlement of electricity consumption and average prices in wholesale and retail markets, the signing and settlement of various retail packages, as well as the list of electricity selling companies with high and low wholesale and retail settlement price differences.

Cai Yuanji believes that this helps users understand the transaction and service situation of different power sales companies, focus on verifiable costs, credit, and services, rather than just focusing on price reductions and "rebates".

Control Risk Exposure

In addition to expanding value-added services, how to control the risks of existing electricity sales business is also a problem faced by such enterprises.

This year, due to factors such as weather and electricity demand, the wholesale purchase cost of electricity in some areas is not synchronized with the retail price adjustment, and the price risk faced by electricity sales companies has increased.

In the electricity spot price surge that occurred in Guangdong in April this year, if the electricity sales company had not locked in sufficient electricity demand through medium and long-term contracts, but instead kept a large amount of electricity in the spot market for procurement, it may have resulted in a situation where the cost of purchasing electricity was higher than the revenue from electricity sales, leading to losses.

Taking a simplified transaction as an example, assuming the retail electricity price is 260 yuan/megawatt hour, 50% of the purchased electricity by the power selling company is purchased through medium and long-term contracts at 320 yuan/megawatt hour, and the remaining 50% is settled at spot prices. In order to achieve a balance between the purchase and sale of electricity without considering other expenses, the average spot settlement price for the remaining electricity should be 200 yuan/megawatt hour.

Calculated based on a total sales of 100 million kilowatt hours, of which 50 million kilowatt hours are settled at spot prices. For every 100 yuan/megawatt hour increase in spot prices, the purchasing cost of electricity for the selling company increases by 5 million yuan.

Cai Yuanji stated that some electricity sales companies in Guangdong have already transferred the expectation of a decrease in purchase prices to users in advance, but have not locked in sufficient electricity in the wholesale market, which makes it easy for wholesale and retail prices to reverse after the spot price rises. The flexibility of wholesale side warehouse adjustment is insufficient, and there is severe homogenization competition in the retail end. The phenomenon of "rebates" has existed for a long time, and multiple factors have jointly caused pressure on the operation of electricity sales companies.

According to Cai Yuanji, in response to issues such as wholesale and retail price inversion, the notice proposes to promote flexible linkage between retail prices and wholesale electricity purchase costs, and guide demand side participation in regulation through time-sharing pricing; Require electricity sales companies to develop time-sharing packages and publicly disclose all packages to facilitate users in comparing settlement rules; Support the formation of differentiated profits based on supply and demand, risk management, and services, and shall not restrict the reasonable profits of individual companies through administrative intervention in violation of regulations. At the same time, the notice also imposes constraints on behaviors such as grabbing customers at ultra-low prices, evading supervision through "yin-yang contracts" and offline rebates.

The draft proposes that electricity sales companies should sign a certain proportion of medium - and long-term contracts in the electricity wholesale market based on the scale of the contracted retail electricity.

The aforementioned person in charge stated that, under the premise of complying with market rules, the specific number of medium and long-term contracts held by the power sales company still needs to be determined based on its own judgment of the market. Even if some power sales companies have exposed risks due to insufficient medium and long-term holdings this year, it does not mean that they will significantly increase their medium and long-term holdings next year.

In addition to the operational risks caused by fluctuations in electricity purchase prices, power sales companies also face adjustments to their performance guarantee requirements.

The draft proposes that power sales companies can use performance guarantees, insurance, or cash deposits as proof of performance protection, and submit them to the power trading institution before participating in the transaction. The amount of performance guarantees and cash deposits should exceed the amount of performance insurance. This does not mean that all electricity sales companies must use bank guarantees.

The draft also proposes that the performance guarantee amount for power sales companies should be calculated based on factors such as expected annual electricity sales, with a minimum of no less than 2 million yuan.

Cai Yuanji stated that the draft proposes to increase the requirements for performance guarantee limits and clarify the relationship between performance guarantees, cash deposits, and insurance limits, which puts higher demands on the funding arrangements of power sales companies.

The draft also proposes that power trading institutions should monitor the remaining amount of performance guarantee and risk exposure of power selling companies on a daily basis, conduct dynamic profit and loss estimates, and dynamically adjust the trading limit of power selling companies for the next trading day based on the remaining amount.

The aforementioned person in charge stated that for power sales companies, increasing the requirement for performance guarantee will push up related costs. In her opinion, the cost of issuing a performance bond by a bank is usually higher than purchasing performance insurance. In the future, the competitiveness of electricity sales companies will come from a combination of trading capabilities, data capabilities, customer service, and compliance risk control. The simple low price volume grabbing model will be difficult to sustain, "said Cai Yuanji.

(Author Pan Juntian)