Out-Law / Your Daily Need-To-Know
China has launched a pilot scheme which will enable renewable energy generators and corporate users to trade directly on green power.
Led by China’s National Development and Reform Commission (NDRC) and National Energy Administration (NEA), the pilot has been rolled out by the Beijing Power Exchange Centre and the Guangzhou Power Exchange Centre which will be also responsible for drafting trading rules, improving the technical functions of trading platform and organising trading relevant work.
The pilot will start with wind and solar power and will be extended to hydropower and other renewables in near future.
Cecilia Hu of Pinsent Masons, the law firm behind Out-Law, said: “This is positive news for the green power generators. It can be evidenced by the significant advances of the share prices for those listed green power generators and power generators who have green power businesses.”
“This might also incentivize more new developments of green power generation facilities, which will bring more opportunities for investors and contractors,” she said.
In the initial stage, areas with strong willingness to consume green power will be selected for the pilot. Green power that has not received government subsidies will be prioritised in trading. If the pilot does not have enough unsubsidised green power, subsidised green power or renewable power purchased by the government can also be traded.
The first green power trade was launched this month with participation of 259 power generators and trade 7.95 billion kilowatt-hour (kWh) electricity, which is estimated to reduce carbon dioxide emissions by 6 million tonnes.
The price of per kilowatt-hour (kWh) of green power in the pilot is expected to be 0.03 yuan (US$0.5 cents) to 0.05 yuan (US$0.8 cents) higher than regular electricity prices in pilot regions, according to a local report.
China aims to reach peak carbon dioxide emissions by 2030 and reach carbon neutrality by 2060.
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