• 7,348 TWh Energy Demand
  • 2,010.4 GW Installed Capacity
  • 38 % Renewable Share

China

China is the world leader in electricity generation with the highest installed capacity of 1,761 GW. While most of the electricity in China comes from coal, China is quickly becoming one of the biggest markets for renewable power. In order to increase renewable adoption, China recently announced a plan to roll out a consumption quota system. This quota based system will force grid companies and power purchasers to procure renewable power.

Market Design

How is the market structured?

The power market in China has a triangular structure: customers buy power from a grid company that purchases power from Independent Power Producers (IPPs) / power generators.

The market covers the whole of China through an interconnected provincial power grid, a provincial branch of the state grid company.

The State Development and Reform Committee is responsible for setting electricity rates.

There is no liquid market for buyers to hedge price risk in China.

Consumers buy power from their local utility (the utility covering the geographic area in which the load – consumer energy requirement – is located).

In general, a tariff can be broken into four components: generation, loss of transmission and distribution, fee of transmission and distribution, and a government fund. These costs reflect the local cost of the utility.

From late 2018, renewable generation in China will be certified and tracked using Renewable Power Certificates (RPC). One RPC is issued for every MW of eligible renewable energy that is delivered to the electricity grid.

Within China, the National Energy Administration (NEA) is the governing body to track RPC.

How are RECs (Renewable Energy Certificates) procured? N/A

Are renewable Power Purchase Agreements (PPAs) available? Yes

Are Green Tariffs available? Yes

Regulators:

  • National Development Reform Commission
  • National Energy Administration

Key Government Departments:

  • National Development Reform Commission
  • National Energy Administration
  • Ministry of Finance of People’s Republic of China

System Operators:

  • State Grid Corporation of China, China Southern Power Grid Company and provincial power companies
  • Total Capacity
  • Total Generation
Source: International Energy Agency, 2019 & China Electricity Council, 2019

Total
Capacity
2,010 GW

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