context: Almost four years after the first set of pilots was launched, energy authorities are expanding reform to broader regions. The spot markets continue to be hampered by incomplete liberalisation that upset prices and the supply-demand balance.
National Development and Reform Commission and National Energy Administration released a document targeting current obstacles in power spot markets.
The document stipulates
- allowing new energy to enter the power markets
- new energy projects will participate by signing long-term CFDs (contracts for differences) with power grids, power sales firms and users
- they are encouraged to trade 10 percent of expected generated power in the current settlement cycle through bidding
- this is the first time renewables’ participation in the power market has been endorsed by national policies; they were previously protected by state priority rules, but their percentage will increase as reform deepens
- boosting cross-region power transfer, at least 20 percent of transmitted power should be traded through market-based measures
- including users in the spot markets so price fluctuations can be received at the user end
- supporting regional power market pilots in the south, and researching plans for Jing-Jin-Ji and the Yangtze River Delta
- six regions (Shanghai, Jiangsu, Anhui, Liaoning, Hubei, Hebei) as the second batch of power spot-market pilots, requiring the first eight pilot regions to make further progress by end 2021