Solid growth: Solar panels in Dunhuang, China. Experts say the country’s electricity market is effectively promoting the consumption of clean energy. — Reuters
Beijing: More than 50% of China’s new green-energy generation was consumed through market-based transactions last year, a milestone that underscores the significant progress of China’s electricity market reforms over the past decade, according to the country’s top energy authority.
China’s national installed capacity for green energy reached 1.45 billion kilowatts last year, making up 43% of the country’s total installed capacity, figures released by the National Energy Administration (NEA) revealed.
Meanwhile, the combined trading volume of green electricity certificates (GEC) reached 446 billion kilowatt-hours, a dramatic 364% increase year-on-year (y-o-y).
This means that roughly one-quarter of all green-energy production realised its environmental value through the green certificate and green electricity market, the NEA said.
GECs are the sole proof of the environmental attributes of renewable energy in China and serve as the only certificate for verifying renewable-energy production and consumption, according to relevant rules.
China’s issuance of green-electricity certificates saw a significant increase in January as the country continues accelerating its push for sustainable growth.
The NEA issued 231.2 million GECs in January, including 94.74 million from wind power, about 40% of the total, 81.82 million from hydropower and 39.43 million from solar power, all of which represent an increase of 225% y-o-y.
China introduced the GEC system as a pilot programme in 2017.
In December 2023, the NEA issued the first batch of GECs after being designated as the authority responsible for green-electricity certificate management.
By the end of January, China had cumulatively issued 5.19 billion green-electricity certificates, according to the NEA.
The figures highlight the deepening impact of power-sector reforms initiated in 2015.
Market-based electricity trading volume has surged from 1.1 trillion kilowatt-hours (kWh) in 2016 to 6.2 trillion kWh last year and now accounts for 63% of total electricity consumption nationwide.
Inter-provincial and inter-regional market trading has seen even more dramatic growth, reaching 1.4 trillion kWh last year, a more than tenfold increase compared with 2016, according to the NEA.
The number of participants in the market has also exploded. Registered market entities have increased nearly 20-fold, from 42,000 in 2016 to 816,000 currently.
The diverse group includes power generators and consumers across various energy sources, from coal-fired plants to green energy and nuclear power facilities.
Industry experts suggest that the continued deepening of China’s electricity market reforms is not only effectively promoting the consumption of clean energy, but also laying the foundation for a more efficient, flexible and sustainable power system, vital for China’s green-energy transition and high-quality economic development.
A major challenge for renewable energy is its variability and the potential for curtailment.
Market-based transactions provide a mechanism to better match supply and demand, incentivising consumption when renewable energy is available and reducing curtailment, said Lin Boqiang, head of Xiamen University’s China Institute for Studies in Energy Policy. — China Daily/ANN
