context: The PRC power market is transitioning from fragmented region-based experiments to a unified national system. The latest 'Basic rules' for metering and settlement announced by the National Development and Reform Commission and the National Energy Administration on 6 August, marks the completion of the foundational '1+6' regulatory framework. Regulators expect for a national power market to be basically established by the end of 2025, with full implementation by 2029.
The latest basic rules on metering and settlement standardise the measurement, recording and provision of data by market entities. They also regulate the settlement services of power trading institutions and the payment/collection of power fees by grid companies.
Metering data is the cornerstone of market efficiency, ensuring the accuracy of electricity volume in transactions, notes Shi Lianjun North China Electric Power University professor. Settlement is a downstream process in the market cycle, and its efficiency affects overall costs. The rules go beyond standard market rules to address both market efficiency and fairness, they add.
In a document explaining the policy background, NEA (National Energy Administration) highlighted growing challenges amid deepening market integration, underscoring the need for national rules,
- inconsistent local metering standards
- poor coordination in settlement processes
- unclear division of responsibilities between grid operators and trading institutions
- delays in electricity fee settlements
The rules will substantially reduce transaction costs, eliminate concerns among market participants, enhance transaction efficiency and promote broader electricity resource allocation, according to Guangzhou Power Exchange Centre.
Release also marks completion of the PRC's foundational '1+6' regulatory framework for power markets. This framework traces back to 2015 when State Council issued a directive on power sector reform. '1' refers to overarching 'Basic rules for power market operation', revised by the National Development and Reform Commission and NEA in 2024. The '6' includes three core and three supporting rules
- core rules
- 'Mid and long-term trading rules for power' (2020)
- broke ground for market-based trading
- 'Notice on implementing electricity spot market rules (trial)' (2023)
- based on pilot spot market trials in Guangdong, Shanxi and Gansu
- 'Electric power auxiliary service market basic rules' (2025)
- established market-based compensation mechanisms for services like peak and frequency regulation, reserve capacity
- 'Mid and long-term trading rules for power' (2020)
- supporting rules
- 'Notice on basic rules for power market information disclosure' (2024)
- standards for the frequency, content and channels of info disclosure for market entities
- 'Notice on the issuance of the Basic Rules for Electricity Market Registration' (2024)
- established unified national registration platform
- standardised procedures for participant certification and info management
- 'Basic rules of metering and settlement in the electricity market' (2025)
- completes the framework
- 'Notice on basic rules for power market information disclosure' (2024)
After more than a decade of reform, market-based power transactions have grown substantially, while six regions have now transitioned to full-scale spot market operation. By the end of 2025, most provinces are expected to initiate trial operations. Interprovincial and interregional trading has also seen rapid growth.