According to the National Energy Administration, more than half of China's renewable energy generation in 2023 will be consumed through market-based transactions, marking important progress in electricity market reform.
By the end of last year, the total installed capacity of new energy in the country reached 1.45 billion kilowatts, accounting for 43% of the country's installed power capacity. At the same time, green electricity certificate (GEC) transactions surged to 446 billion kWh, a 364% year-on-year surge. This means that about a quarter of the country's renewable electricity has realized its environmental value through the GEC market and green power trading.
As the only proof of the environmental attributes of renewable electricity in China, GEC can be used to verify the production and consumption of renewable energy. In January this year, the National Energy Administration issued 231.2 million GECs, a year-on-year increase of 225%. Among them, 94.74 million wind power certificates, accounting for about 40%; 81.82 million hydropower certificates; 39.43 million solar power generation certificates.
Since the pilot project in 2017, the GEC system has been continuously improved. In December 2023, the National Energy Administration officially took over the management of GEC and issued the first batch of certificates. As of the end of January 2024, the cumulative issuance has reached 519 million.
The effectiveness of the power market reform is not only reflected in the new energy trading, but also promotes the rapid expansion of the overall market-oriented trading scale. Market-based electricity trading will jump from 1.1 trillion kWh in 2016 to 6.2 trillion kWh in 2024, accounting for 63% of the country's total electricity consumption.
The growth of inter-provincial and inter-regional transactions is even more staggering, with 1.4 trillion kWh of transactions in 2024, an increase of more than 10 times compared to 2016. At the same time, the number of market entities has also increased significantly, from 42,000 in 2016 to 816,000 today, covering various power generation enterprises and power users such as thermal power, nuclear power and new energy.
Figure: China's new energy market-based trading exceeded 50% The power reform has achieved remarkable results
Industry insiders believe that the continuous deepening of the power market reform has not only accelerated the consumption of clean energy, but also promoted the development of the power system in a more efficient, flexible and sustainable direction, laying the foundation for China's energy transition and high-quality economic growth.
Lin Boqiang, dean of the China Energy Policy Research Institute at Xiamen University, pointed out that the volatility of renewable energy and power rationing are challenges in development. Market-based trading mechanisms can optimize the matching of supply and demand, and incentivize users to use electricity when new energy sources are abundant, thereby reducing waste and improving utilization.
"Market-based trading guides power generation and consumption decisions through price signals, making the allocation of power resources more economical and environmentally friendly." Lin Boqiang said.
Hao Ruifeng, director of the Department of Market Regulation of the National Energy Administration, said that China has established a complete power market system covering medium and long-term trading, spot markets, ancillary services, GEC trading, etc.
Nowadays, medium and long-term transactions have become normalized, the construction of the spot market is also accelerating, and the market mechanism is becoming an important tool to optimize the allocation of power resources across the country.
China's renewable energy utilization rate has remained above 95%. In 2024, the national green power trading volume will reach 233.6 billion kWh, a year-on-year increase of 235%.
