Market Reform of New Energy On-Grid Electricity Prices

This policy interpretation details the market-oriented reform of new energy on-grid electricity prices in China, effective from June 2025. It promotes full market participation for new energy electricity, with prices formed through trading. A key feature is the establishment of a sustainable development price settlement mechanism, which includes a difference settlement process for electricity volumes included in the mechanism. The policy differentiates between existing projects (commissioned before June 1, 2025) and incremental projects (from June 1, 2025), with specific rules for electricity volume, mechanism price, and implementation period. For existing projects, the mechanism price is capped at the local coal-fired benchmark price, while incremental projects determine prices through annual bidding. The settlement method involves monthly difference settlements based on the average market trading price, with costs included in local system operation costs. The policy aims to ensure fair responsibility sharing, policy coordination, and support for high-quality new energy development, with provisions for project withdrawal and tracking evaluation.