Chris Hankin
On February 9, China’s National Development and Reform Commission and National Energy Agency jointly published a “Notice on Deepening Market-Based Reform of Renewable Energy On-Grid Tariffs to Promote High-Quality Renewable Energy Development.” Hereafter referred to as Document 136, this policy drastically changed the character of China’s power sector, advancing market liberalization reforms in one of the nation’s most stubbornly top-down sectors.
Document 136 is significant because it requires that by the end of 2025, provincial governments push all wind and solar electricity projects to sell their electricity production through the market. This is a huge change from today, when nearly 50 percent of all renewable energy is sold via guaranteed offtake agreements at predetermined volumes and prices to the grid, regardless of market dynamics like supply and demand.
According to Cosimo Ries, Renewable Energy Analyst at Trivium China, “this marks the end of an era.”
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