China’s unified power market to give renewable energy a boost, but its implementation could be an uphill task, analysts say
- China’s ambition to build a national electricity market could be held back by ineffective power trading programmes and potentially large trading volumes
- Regulators last week released a policy document to improve the mechanism of the nation’s low-carbon transformation
China’s ambition to build a unified electricity market to support its climate goals could lead the sector into a new era and give renewable energy a big push, analysts said. However, ineffective power trading programmes and potentially large trading volumes suggest the system could be difficult to implement.
China’s top government agencies, the National Development and Reform Commission (NDRC) and the National Energy Administration, on Thursday jointly released a policy document to improve the mechanism of the nation’s low-carbon transformation, reiterating the goal of forming a nationally unified power market.
The document comes close on the heels of guidelines introduced on January 28 by the same agencies, which said that China will study and promote the development of a national unified power market.
By 2025, a primary national market is expected to take shape to operate collaboratively with existing provincial markets and cover medium and long-term trading, spot power trading and ancillary services trading, according to the document. It also called for a national power trading system that includes renewable power producers to be completed by 2030.
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“The directive to build a nationally unified power market signals that policymakers are committed to pursue a more renewables-based future,” said Andy Chen, senior analyst at Trivium China, a Beijing-based consultancy.
