Market-Oriented Reform of New Energy On-Grid Pricing for High-Quality Development

On February 9, 2025, China's National Development and Reform Commission and National Energy Administration issued a notice to deepen market-oriented reform of new energy on-grid pricing, promoting full market entry for new energy electricity. This reform shifts from fixed pricing to a supply-demand pricing model, ensuring equal market rights for new energy and traditional energy. Key measures include full participation in market trading, market-based price formation, and a price difference settlement mechanism for sustainable development. The policy differentiates between existing and incremental projects, using June 1, 2025, as the cut-off. It aims to optimize resource allocation, enhance competitiveness, and support high-quality development of the new energy sector while addressing challenges like volatility and intermittency. This marks a significant step in China's energy transition, fostering a fairer market environment and stimulating innovation.