The goal is to improve energy reliability, lower costs and integrate renewable energy sources like solar, wind and hydropower into the grid more effectively. — China Daily
Beijing: China is on track to establish a national unified power market by 2029 with a preliminary structure to be established by 2025, further integrating renewable energy sources while optimising the distribution of power across the vast national grid, say industry experts.
Clear pathways will be defined for renewable-energy participation, while mechanisms to ensure reasonable returns on renewable-energy investments will be explored, according to the National Unified Power Market Development Plan Bluebook released by the China Electricity Council in Beijing last Friday.
A national unified power market is a system where electricity is bought, sold and distributed across the entire country in a standardised way.
It would connect all regions, ensuring equal access to power, promote competition and allow for efficient pricing.
The goal is to improve energy reliability, lower costs and integrate renewable energy sources like solar, wind and hydropower into the grid more effectively.
Such a market also ensures fair regulation and supports investment in modern energy infrastructure.
According to the bluebook, before 2025, more than 50% of renewable energy will be integrated into the market and all of the renewable energy will fully participate in the market by 2029, with steady progress in the marketisation of hydropower, nuclear power and distributed renewable energy.
With increasing pressure to absorb the ever-climbing amount of renewable energy in the country, market mechanisms needed to handle the volatility and forecasting challenges of renewable energy are still underdeveloped, making it necessary to design a market system and trading mechanisms that are tailored to the characteristics of renewable energy to better support its integration into the market, it said.
S&P Global Commodity Insights had previously forecast that China aspires to establish a national unified power market preliminarily by 2025 and at a basic level by 2030.
Power-market reform in China has made major strides forward since late 2021, with all coal-fired power entering market trading, abolishment of regulated retail tariffs for commercial and industrial power users, start of pilot trading of green-power contracts, and liberalisation of ancillary services, it said.
China is already accelerating the pace of renewable-energy market integration, said Pan Yuelong, chairman of the council.
In 2023, the total market-based electricity transactions for renewable energy nationwide reached 684.5 billion kilowatt-hours, accounting for 47.3% of all renewable energy generated, with some large power companies seeing their share of renewable energy in market transactions exceed 50%, said Pan.
The scale of green power and green-certificate trading also continues to expand.
In the first half of 2024, the national green-power trading volume reached 151.93 billion kilowatt-hours, a year-on-year increase of 233%, while 160 million green certificates were traded, he said. — China Daily/ANN
