context: The State Council 'Implementation opinions on improving the national unified power market system' put forward design principles and a long-term vision for the national market. 19 tasks are outlined across five areas, set to guide work across the 15th 5-year plan period. Beijing is aiming to establish a unified national power market by 2030.
Improving the national power market is crucial for building the new power system, according to Yang Kun 杨昆 China Electricity Council vice-president. During the 14th 5-year plan
- annual electricity consumption surpassed 10 tn kWh
- installed renewable capacity exceeded 1.8 bn kW, growing at 28 percent pa
During the 15th 5-year plan
- electricity demand is expected to increase by around 600 bn kWh per year, driven by EVs, data centres and green hydrogen
- by 2030, renewable capacity is projected to exceed 50 percent of the total, with renewable penetration reaching over 30 percent
A unified market can address challenges from rapid renewables growth. The market also helps maintain reasonable prices, ensure safe and stable power supply and stabilise energy costs, all vital for boosting consumption.
The opinions propose several reform measures to resolve key barriers and enhance efficiency, including
- breaking market barriers to achieve nationwide power interconnection
- neighbouring provinces encouraged to 'snowball' into joint market operations
- unified transaction model allows participants to submit single bids that can be matched nationally, improving timliness and flexibility
- encouraging diverse and equitable market participation
- introduce various generation sources in phases, including gas, hydro and nuclear
- large-scale renewable bases in desert and arid regions to enter through joint operations
- distributed renewables can trade via aggregation mechanisms
- emerging entities such as virtual power plants, microgrids and flexible loads encouraged to participate
- introduce various generation sources in phases, including gas, hydro and nuclear
- deepening market mechanisms and enhancing system functions
- strengthen capacity pricing mechanisms for coal, pumped hydro and new energy storage
- ensure that ancillary service costs are reflected in spot markets
- explore capacity markets where conditions permit
- strengthening retail market governance
- standardise power retail companies, update regulation and transaction rules, improve price linkages between wholesale and retail markets
- unlock greater flexibility and demand side participation through time-of-use pricing
The 20th CPC Central Committee's Fourth Plenary Session introduced the strategic goal of becoming an energy superpower. Recognising the importance of a unified power market, it outlined key directions
- deepening power market reform
- continue to develop mid and long-term trading, spot, ancillary services, capacity and retail markets
- break down regional segmentation
- establish a national power market evaluation system
- upgrading power infrastructure
- accelerate construction of next-gen power grid, transmission corridors, inter-provincial/regional transfer capacity
- build coordinated dispatch and info systems that align with market operation
- strengthening innovation and productivity in the energy sector
- advance tech innovation, pilot smart grid and renewable integration tech and promote AI+power applications
- encourage models like computing-power collaboration, VPPs, coordinated carbon-power operations and new applications for digital power systems
- unifying technical standards
- develop and accelerate the adoption of common technical standards that act as a 'universal language'