Amid power shortages, the National Development and Reform Commission (NDRC) of China issued a notice allowing the market trading price of coal-fired power to be raised or lowered by up to 20% of the benchmark on-grid tariff, from the current 10% and 15%, respectively. The notice took effect on October 15th.
Workers from the China Southern Power Grid subsidiary in Hainan. Photo: Xinhua
As soon as the notice came into force, the power trading price in Jiangsu, a eastern province in China, surged by 19.94%, just a step away from the upper limit of 20%.
Ms. Li Heyan, founder of Solarbe Consulting, believes that allowing provinces to float electricity prices can ease the pressure on coal-fired power plants in the short term, while boosting their valuation in the long term.
She added that, rising coal-fired power tariffs could give renewable energy sources an edge in market competition and lift the premium of green power.
In September, 2021, China launched its green power trading pilot that provides a market-oriented trading platform for wind power and solar PV. The premium of green power to conventional electricity was 0.03-0.05 yuan/kWh in the first transactions.
As China is tightening control over projects with high energy consumption and high emissions, and with the rising prices of coal-fired power, commercial and industrial users, especially energy-consuming enterprises are likely to have greater demand for green power. This could further drive up the premium of green power trading, benefiting both wind power and solar PV.
