green electricity certificates to help energy intensity target

context: Replacing direct subsidies to support the expansion of renewables, China has moved to a new support system that mandates increased consumption. Green energy certificates are now the only proof of domestic renewable power consumption. On 2 February 2024, NDRC (National Development and Reform Commission), NBS (National Bureau of Statistics) and NEA (National Energy Administration) issued ‘Notice on strengthening the interface between green electricity certificates and policies on energy saving and carbon reduction, and vigorously promoting the consumption of non-fossil energy’. Regulations are forthcoming.

The new GEC (green electricity certificates) notice clarifies that GECs will be included in the calculation of energy-intensity targets in the 14th 5-year plan. It stipulates that GECs can be used to offset a province’s energy consumption, but imposes a cap from inter-provincial trading at a maximum of 50 percent for this offset, notes Caixin

The notice also urges provincial governments to more carefully consider the limitations for inter-provincial purchase, particularly in scenarios where direct acquisition of green energy is hindered by

  • lack of green power supply
  • limited grid transmission capacity 

It calls for provinces, notes Caixin, to set up mandatory renewable power consumption mechanisms for high-energy use enterprises and ‘reasonably’ increase consumption requirements.

Responsibility for renewable power consumption should be given to key energy consumption units, the notice states. Provinces should explore budget management of fossil fuel use at key energy consumption units, with excess use able to be offset by purchase of GECs and green electricity. 

The supply of GECs in the trading market has increased over the last few months with the GEC unit price has decreasing from C¥40 to C¥8, corresponding to a decrease in the electricity price from C¥0.04 to C¥0.008 per kilowatt, the article notes.