中國(guó)電力行業(yè)未來(lái)：理解中國(guó)碳中和路徑和電力行業(yè)改革的多模型方法

EEIST

PowErSEcTorfuTurESInchIna

amulTI-modElaPProach

ToundErSTandIngchIna’S

carbon-nEuTralPaThwayS

andPowErSEcTorrEform

lEadauThorS:ArAbellAMiller-WAng1,HongyuZHAng2,PetebArbrook-JoHnson1,

yixuAnZHAng1,PiMVercoulen3,FeMkeniJsse4,yuyAnWeng2,siMonsHArPe6,

JeAn-FrAncoisMercure4,7,MicHAelgrubb8,xiliAngZHAng2

1universityofoxford,2tsinghuauniversity,3cambridgeeconometrics,4universityofexeter,5unFcccclimatechampions,6Worldresourcesinstitute,7Worldbank,8universitycollegelondon

ThisreportisjointlypublishedbyTsinghuaUniversity’sInstituteofEnergy,

Environment,andEconomy(3E)andotherpartnersintheEconomicsof

EnergyInnovationandSystemTransition(EEIST)project.Itspurposeisto

showcaseandcomparesomeoftheneweconomy-energymodellingthat

3EanditspartnersintheEEISTprojecthaveconductedontheChinese

powersector.Thesemodelsareusedtoexplorethepowersector’srolein

China’spathwaytocarbonneutralityandthepotentialimpactofdifferent

electricitypricingsystems.

Contents

Shortsummaryofreportpurpose2

Contents2

Executivesummary4

1.Introduction6

2.Amulti-modelapproachtomodelling

thepowersector14

2.1.TheRenewableElectricityPlanningand

Operation(REPO)Model16

2.2.TheE3ME-FTT:Powermodel21

1.1.China’slong-termclimateobjectives7

1.2.China’spowersector12

1.3.Publicsectorandpolicy10

2.3.REPOresults–imaginingapathwayfor

China’spowersector28

2.4.E3ME-FTT:Powerresults–theimpact

ofdifferentpricingapproaches36

2.5.ComparisonofREPOandE3ME-FTT:

Powerresults41

3.Policyimplications48

3.1.MarketreformofChina’spowersector513.2.EmissionTradingSystem523.3.PublicR&D53

3.4.Deploymentofrenewableenergyandstorage54

About

TheEconomicsofEnergyInnovationandSystemTransition(EEIST)projectdevelopscutting-edgeenergyinnovationanalysistosupportgovernmentdecisionmaking

aroundlow-carboninnovationandtechnologicalchange.

ByengagingwithpolicymakersandstakeholdersinBrazil,China,India,theUKand

theEU,theprojectaimstocontributetotheeconomicdevelopmentofemergingnationsandsupportsustainabledevelopmentglobally.

LedbytheUniversityofExeter,EEISTbringstogetheraninternationalteamof

world-leadingresearchinstitutionsacrossBrazil,China,India,theUKandtheEU.

Theconsortiumofinstitutionsare:UK–UniversityofExeter,UniversityofOxford,

UniversityofCambridge,UniversityCollegeLondon,AngliaRuskinUniversity,CambridgeEconometrics,ClimateStrategies;Brazil–FederalUniversityofRiodeJaneiro(UFRJ),

UniversityofBrasilia(UNB),UniversityofCampinas(UNICAMP);EU–ScuolaSuperiore

diStudiUniversitariediPerfezionamentoSant’Anna(SSSA);China–BeijingNormalUniversity,TsinghuaUniversity,EnergyResearchInstitute;India–TheEnergyandResourcesInstitute,WorldResourcesInstitute.

TheEUpartnerSSSAcontributedasaleadingorganisationwithfocusonBrazilcontextandresearch.

Contributors

EEISTisjointlyfundedthroughUKAidbytheUKGovernmentDepartmentforEnergySecurity&NetZero,andtheChildren’sInvestmentFundFoundation(CIFF).

Contributingauthorsaredrawnfromawiderangeofinstitutions.Forfullinstitutionalaffiliationssee

www.eeist.co.uk

Thecontentsofthisreportrepresenttheviewsoftheauthors,andshouldnotbetakentorepresenttheviewsoftheUKgovernment,CIFFortheorganisationstowhichtheauthorsareaffiliated,orofanyofthesponsoringorganisations.

Acknowledgements

TheauthorswishtothanktheUKDepartmentforEnergySecurity&NetZero,theChildren’sInvestmentFundFoundation(CIFF),andFounders’PledgefortheirsupportassponsorsoftheEEISTproject.Wealsowishtothankallthosewhocontributedtheirtimeandexpertisetodevelopingandrefiningtheanalysis,conceptsandideaspresentedinthisreport,andinbringingittopublication.Thisincludes,butisnotlimitedto:JacquiRichards,SarahBoard

andindividualsfromtheCommunitiesofpracticeinEEISTpartnercountries,theEEISTSeniorOversightGroup,andtheUKgovernment.

EditedbyCustomEditorial:

www.customeditorial.co.uk

3

4

EEIST

Executivesummary

ThisreportoutlinespowersectorreformsdevelopinginChinaandtheincreasinglycomplexlandscapeofclimateandenergypoliciesintendedtosupportcarbon

neutrality.Itthenpresentstwodifferentbutcomplementaryenergy-economy

modelsoftheenergytransitionandpowersectorinChina:theREPOmodel

developedby3EatTsinghuaUniversityandtheE3ME-FTT:PowermodeldevelopedbytheUniversityofExeterandCambridgeEconometrics.

ThesemodelsareusedtoilluminatepossiblefuturesfortheChinesepower

sector.Incombination,theyshowthat,whichevermodellingapproachwetake,

theimpendingdominanceofsolarandwindpowerinChinaisclear.However,

theimplicationsofthistransitionforcostsandwidermacroeconomicimpacts

aremoresubtle.Costscouldincreaseordecreasedependingonwhatpricing

mechanismsareusedandourassumptionsabouttheexactpowermix.Impacts

onGDPandinvestmentappeartobepositiveinhighrenewablescenarios,buttheimpactsonemploymentvarybysectorandaremorebalancedinouranalysis.

ThesefindingshaveseriousimplicationsforarangeofpolicyissuesinChina.

Theysuggestpowersectorreforms,andspecificallymarket-basedpricing

mechanisms,havethepotentialtosupportChina’scarbonneutralitygoal.

TheyalsomakecleartheroleoftheETSinsupportingthegoal,througha

meaningfulcarbonprice.Finally,bothsetsofanalysismakeclearerthan

evertheneedtoaddressarangeofpotentialbarrierstorapiddeployment

ofrenewables,whetherfinancial,technical,legalorotherwise.

5

6

EEIST

1.Introduction

Overthepastfouryears,theEEISTprojecthasdevelopedseveralcutting-edge

economicandenergymodelsaimedatequippingpolicymakerswithtoolsto

informpoliciesthatencouragetheenergytransition.AmongtheseistheFuture

TechnologyTransformationsPowermodel,(referredtoasFTT:Power).This

dynamic,non-equilibriummodelsimulatescompetitionbetweenvariouspower

generationtechnologies,takingintoaccountfactorssuchascost,performance,

technologicallearningandpolicyimpacts.Themodelencompasses71regions,

includingChina.FTT:PoweriscoupledwiththeE3MEmacroeconomicmodel.

TheRenewableElectricityPlanningandOperation(REPO)Model,ontheother

hand,isacapacityexpansionanddispatchmodeltailoredspecificallyforChina

bythe3EInstituteatTsinghuaUniversity.Thismodelaimstominimisethetotal

discountedcostofthepowersystem,offeringoptimalcapacityandpower

generationsolutionsforeachtechnology,transmissioncapacitiesbetween

provinces,andcarbonemissionlevels.

Thisreportshowcasesandcomparesthedesignandoutputsgeneratedby

thesetwomodelsforChina’spowersector.Itaimstohighlightkeyoutputsand

policyimplications,aswellasthesimilaritiesanddifferencesinmodeldesign

andpurpose.Wedothisagainstthepolicylandscapeofsignificantdiscussion

andactiononpowerreforminChina.

Ourobjectiveistwofold:

1.togainadeeperinsightintoChina’spowersectorusingcutting-edge

economic-energymodels,and

2.todeepencollaborationandunderstandingbetweenmodellingteams

andanalystsinsideandoutsideChina.

Thereportcomprisesthreesections.Therestofthisintroductionoffersan

overviewofChina’spowersectorandthepolicycontext,includingplansto

transitiontowardslow-carbonenergyproduction.Thesecondsectiondescribes

theFTT:PowerandREPOmodels,detailingtheirprinciples,assumptions,scenariosandresults.Thisincludesadirectcomparisonofmodelresults,identifyingareas

ofalignmentanddivergence.Finally,weconsiderthepolicyimplicationsfor

Chinaderivedfromthesemodelanalyses.

1.1.China’slong-termclimateobjectives

InSeptember2020,PresidentXiJinpingannounced

thegoalsofachievingcarbonpeakingbefore2030andcarbonneutralitybefore2060,toaddress

climatechange.ThegoalsarealsoreflectedinChina’supdated2030NationallyDetermined

Contributions(NDC)1inaccordancewiththe

ParisAgreement,andChina’sfirstlong-termlowgreenhousegasemissiondevelopmentstrategyinthemiddleofthiscentury.2

China’senergysystemisfacingprofound

transformation.InOctober2021,theCentral

CommitteeoftheChineseCommunistPartyand

theStateCouncilissuedtheWorkingGuidanceforCarbonDioxidePeakingandCarbonNeutrality

inFullandFaithfulImplementationoftheNew

DevelopmentPhilosophy,aswellastheActionPlanforCarbonPeakbefore2030.Thesedocuments

outlinethattheproportionofnon-fossilenergy

consumptionneedstoreacharound25%by2030,andthecarbondioxideemissionsperunitofGDPneedstodecreasebymorethan65%by2030

comparedto2005.3By2060,theproportionofnon-fossilenergyconsumptionneedsto

exceed80%.4

TheCentralFinancialandEconomicAffairs

Commissionhasproposedtobuildanewtypeof

powersectorwith‘newenergy’(i.e.renewables)as

themainenergysourceforthefirsttime.Atarget

totalinstalledcapacityofwindandsolarpower

reachingover1200GWby2030wassetoutbythe

StateCouncil.6Newtargetshavealsobeensetfor

thedevelopmentofenergystorage,tomeetthehigh

proportionandlarge-scaledevelopmentneedsof

newenergy.By2025,theinstalledcapacityofnew

energystorageneedstoreachover30MW,andthe

installedcapacityofpumped-hydrostorageneeds

toexceed62GW.By2030,theinstalledcapacityof

pumped-hydrostorageneedstobearound120GW.7

Topromotetheachievementofthesegoals,China

haslaunchedaseriesofpolicies,includingongreen

electricity,8therenewableportfoliostandard(RPS)9andacarbonmarket.10Inaddition,intermsofmarketmechanism,Chinawillfurtherpromotethereform

ofthepowersector,andwillinitiallyestablisha

nationwideunifiedpowermarketsystemby2025,

andbasicallyestablishanationwideunifiedpower

marketsystemby2030.11Thesearedescribedin

detailbelow.

1StateCouncil,China’sAchievements,NewGoalsandNewMeasuresforNationallyDeterminedContributions.2021.

/sites/NDCStaging/

Pages/Party.aspx?party=CHN

2StateCouncil,China’sMidCenturyLong-TermLowGreenhouseGasEmissionDevelopmentStrategy.2021.

/sites/default/files/resource/

China%E2%80%99s%20MidCentury%20LongTerm%20Low%20Greenhouse%20Gas%20Emission%20Development%20Strategy.pdf.

3StateCouncil,ActionPlanforCarbonDioxidePeakingbefore2030.2021.

/zhengce/zhengceku/2021-10/26/content

_5644984.htm

4CCCPC(CentralCommitteeoftheCommunistPartyofChina)andStateCouncil,WorkingGuidanceforCarbonDioxidePeakingandCarbonNeutralityinFullandFaithfulImplementationoftheNewDevelopmentPhilosophy.2021.

/zhengce/2021-10/24/content

_5644613.htm

5StateCouncil,ActionPlanforCarbonDioxidePeakingbefore2030.2021.

/zhengce/zhengceku/2021-10/26/content

_5644984.htm

6NDRC(NationalDevelopmentandReformCommission)andNEA(NationalEnergyAdministration),Guidingopinionsonacceleratingthedevelopmentofnewenergystorage.2021.

/gongbao/content/2021/content

_5636148.htm

7NEA,Mediumandlong-termdevelopmentplanforpumpedstoragehydropower(2021-2035).2021.

/2021-09/17/c

_1310193456.htm

8NDRC,MOF(MinistryofFinance)andNEA,Noticeontrialimplementationofrenewableenergygreenpowercertificateissuanceandvoluntarytradingsystem.2017.

/xinwen/2017-02/03/content

_5164836.htm

9NDRCandNEA,Noticeonthe2021renewableelectricityconsumptionquotaandrelatedmatters.2021.

/zhengce/zhengceku/2021-05/26/

content_5612441.htm

10MEE(MinistryofEcologyandEnvironment),2019-2020ImplementationPlanforNationalCarbonEmissionsTradingTotalAllowancesSettingandAllocation(PowerSector).2021.

/xxgk2018/xxgk/xxgk03/202012/t20201230

_815546.html.

11NDRCandNEA,Guidingopinionsonacceleratingtheconstructionofauniformnationalelectricitymarketsystem.2022.

/zhengce/

zhengceku/2022-01/30/content_5671296.htm

7

8

Capacity(Gw)

2500

2000

1500

1000

500

0

1.2.China’spowersector

Capacity

ThedevelopmentofinstalledcapacityinChina

from2010to2021isshowninFigure1,usingdatafromtheChinaElectricityCouncil(CEC).Inthe

pastdecade,thetotalinstalledcapacityofChina’selectricityhasbeencontinuouslyincreasingto

meetgrowingdemand,from966GWin2010to1,525GWin2015,andfurtherincreasingto2,378GWin2021.

Whilebothfossilfuel(thermal)powerandhydropowerhaveseenincreasesintheirinstalledcapacitiesoverthepast10years,theirproportionswithinChina’spower

mixhavedecreased.From2010to2021,Chinahas

witnessedasubstantialriseintheinstalledcapacitiesofnuclear,windandsolarpower.Comparedtothermalandhydropower,theinstalledcapacityofnuclear,windandsolarpowerinChinahasgrownsignificantlyinthepastdecade.Preliminary2022and2023figuresfromtheCECsuggestthesetrendshavecontinued.

Figure1:GenerationcapacityofChina’spowersectorin2010–2021.Source:CEC.12

2018

2011

2012

2013

2014

2015

2016

2017

2019

2020

2021

2010

.Solar.Wind.Nuclear.Hydro.Thermal

12CEC,ChinaElectricPowerStatisticalYearbook.2022.

9

Generation(Twh)

Generation

ThechangesinChina’selectricitygeneration

structurefrom2010to2021areshowninFigure2.Inthepastdecade,China’stotalpowergenerationhasshownacontinuousupwardtrend,almostdoublingbetween2010and2021to8400TWh.Affectedbytheeconomyandtheepidemic,China’stotalpowergenerationslowedsignificantlyin2015andfrom

2019-2020.However,in2021,withtheeconomic

recoveryfollowingtheepidemic,China’stotalpowergenerationshowedrapidgrowth.PreliminaryCECfiguresfor2022suggesttotalgenerationthen

plateauedagain.

China’selectricitysupplyhasbeenmainlybasedon

thermalpowertechnologyforalongtime,accountingforabout70%,followedbyhydropower,accounting

forabout20%.Inthepastdecade,theproportionof

thermalpowertechnologyinpowergenerationhas

graduallydecreased,from81%in2010to68%in2021.However,inabsoluteterms,thermalpowergenerationhascontinuedtogrow,fromjustunder3,500TWh

in2011toover5,500TWhin2021.Itwillstillbethe

largestsourceofelectricitygenerationinChinainthenearfuture.Preliminaryfiguresforhydropowerfor2022and2023suggestitspercentagecontributiontogenerationmaybefalling.

Inthepastdecade,theoverallhydropowergenerationhasalsoshownagrowthtrend,whiletheproportionof

powergenerationhasremainedataround20%,with

littlechange.Hydropowergenerationhasdoubled

from670TWhin2010to1340TWhin2021.Atthe

sametime,hydropowerisalsothemainsourceof

renewableenergygenerationinChina,accounting

for16%ofthetotalelectricitygenerationin2021.

Nuclearpower,windpowerandsolarpower

technologiesweredevelopedrelativelylateand

occupyasmallproportionintheelectricitygeneration

structure.However,thesetechnologieshavebeen

widelydevelopedanddeployedinthepastdecade,

andtheirproportionhasbeencontinuouslyexpanding.

Nuclearpowergenerationgrewfrom75TWhin2010to408TWhin2021.Thegrowthrateofnuclearpowergenerationhasstayedhigh,generallyabove10%.

Windpowerhasalsodevelopedrapidlyinthepast

decade,withanelectricitygenerationofonly49TWh

in2010andreaching656TWhin2021,achievinga

morethantenfoldexpansion.Althoughthegrowth

rateofwindpowergenerationhasfluctuated

significantlyinrecentyears,ithasremainedata

relativelyhighlevel,achievinga40%growthin2021,

indicatingitsincreasinglyimportantpositioninthe

powergenerationsysteminrecentyears.Solar

powergenerationwasalmostnegligiblein2010,

butinrecentyearshasdevelopedfasterthanany

otherpowergenerationtechnology,surpassing100

TWhin2017,200TWhin2019and327TWhin2021.

Figure2:ElectricitygenerationofChina’spowersectorin2010–2021

9000

8000

7000

6000

4000

3000

2000

1000

0

201020112012201320142015201620172018201920202021

.Solar.Wind.Nuclear.Hydro.Thermal

Capacity(Gw)

Energystorage

Asakeytechnologytomaintainthebalance

betweensupplyanddemandofpowersystems,

energystorageisalsodevelopinginChina.The

country’stotalinstalledcapacityincreasedfrom17GWin2010to23GWin2015,andfurtherincreasedto43GWby202114(Figure3).Inaddition,China’s

energystoragecapacityhasshownanacceleratinggrowthtrendinrecentyears,withanadditional3.3GWinstalledin2020and7.8GWinstalledin2021,bothofwhicharethehighestlevelsofinstalled

capacitygrowthinthepastdecade.

DespitethecurrentpredominanceofpumpedhydrostorageinChina,therehasbeenanotableincreaseinthedeploymentofbatterystorage.Pumped

hydrostorageisthemostmatureenergystoragetechnologyatpresent.Itusesthepotentialenergydifferenceofwaterresourcestoachieveelectricityloadingorunloading.Ithastheadvantagesoflonglifetime,lowunitcostandlargecapacity.Thistypeofenergystoragecapacitycanreachmorethan

severalthousandmegawatts,whichissuitableforlarge-scaleandsystem-levelapplicationsonthegridsideandmainlyusedinthetransmissionanddistributionsectoroflargepowergrids.

China’slong-termenergystoragemainlyreliesonpumpedhydrostorage,andtheproportion

ofpumpedstorageinstalledcapacityinthetotal

energystoragecapacityhasbeenabove85%foralongtime.However,pumpedhydrostoragehasthedisadvantagesofslowresponse,longconstructionperiodandgeographicallocationconstraints.In

contrast,batterystoragehasashortconstructionperiod,simpleandflexiblesiteselection,strong

adjustmentability,largeorsmallvolume,fast

reactionspeed,millisecondtosecondresponse,andflexibledeploymentinvariousapplicationscenariossuchaspowersupply,powergridanduserside.

Inrecentyears,thedevelopmentofbatterystoragehasbeenrapid.Withtherapiddecreaseincosts,

itsinstalledcapacityhasgrownsignificantly,and

theproportionofinstalledcapacityisconstantly

increasing.Therearealsoarangeofmandatory

storageallocationandsubsidypolicieswhichhave

supportedthistrend.Bytheendof2021,theinstalledcapacityofpumpedstorageinChinareached

37.6GW,accountingfor87%ofthetotalinstalled

capacity,theinstalledcapacityofbatterystoragereached5.1GWor12%ofinstalledstoragecapacity,andcompressedairstorageandflywheelenergy

storageaccountedforlessthan1%.Preliminary

figuresfor2023areevenmorestriking,suggestingChinainstalled8.63GWofnon-hydrostorage

capacitybetweenJanuaryandAugust2023.

Figure3:StoragecapacityofChina’spowersectorin2010–202115

50

45

40

35

30

25

20

15

10

5

0

201020112012201320142015201620172018201920202021

14CNESA(ChinaEnergyStorageAlliance),WhitePaperonEnergyStorageIndustryResearch.2023.

15CNESA(ChinaEnergyStorageAlliance),WhitePaperonEnergyStorageIndustryResearch.2023.

10

11

Theelectricitymarket

TheNationalDevelopmentandReformCommission

(NDRC)andtheNationalEnergyAdministration(NEA)jointlyissuedtheGuidingOpinionson

AcceleratingtheConstructionofaNationally

UnifiedElectricityMarketSysteminJanuary

2022,whichspecifiesthecompletionby2030ofa

standardmedium-to-long-term,spotandauxiliaryserviceelectricitymarketsystemadaptedtothe

requirementsofanewtypeofelectricpowersystem.

Themid-long-termmarketformsthebackbone

ofpowertradingvolume,facilitatingmulti-year,

annual,quarterly,monthlyandweeklytransactions,includingelectricenergy,interruptibleloadsand

auxiliaryserviceslikevoltageregulation.Currently,

annualandmonthlytradingdominatethismarket.

Themainparticipantsarecoalpowerenterprises,

industrialandcommerciallarge-scaleusers,and

power-sellingcompanies.Partofthepowerisalso

fromsolarandwind,hydropowerandnuclearpowerplants.Theaveragemarkettradingpriceofcoal-

firedgeneratingunitsnationwidein2022wasRMB

0.45/kWh.16CECdatashowsthatthetotalamountofelectricitydirectlytradedinthenationalmid-long-

termmarketin2022amountedto4,100bnkWh–

ayear-on-yearincreaseof36.2%–maintainingashareofover90%ofthetotaltradedelectricity.17

Tradingwithinprovincesaccountedfor96.9%,whiletradingbetweenprovinceswas3.1%ofthemarket.

Thespotmarketconstructionisadvancingsteadily.Thismarketmainlycarriesoutday-ahead,intra-dayandreal-timeelectricenergytradingand

auxiliaryservicetrading,suchasstandbyandfrequencyregulation.Thefirstbatchofeightpowerspotmarketpilots(Shanxi,Shandong,Guangdong,Gansu,Mengxi,Zhejiang,Fujian,

Sichuan)hassuccessfullycompletedextendedtrial

operations,whilethesecondbatchofsixpilots

(Henan,Liaoning,Jiangsu,Anhui,Hubei,Shanghai)

conductedsimulationtrialoperation,establishing

aninitialpricingmechanismthatreflectsreal-time

powersupplyanddemand.Theparticipantsare

morediversified,withrenewableenergy(including

‘virtualpowerplants’madeupofnetworksofsmall

producers),nuclearpower,hydropowerandother

prioritysourcesplayingasignificantrole.Small-

scaleindustrialandcommercialusers,distributed

energystorage,distributedphotovoltaicsystems

andelectricvehiclesareprogressivelyenteringthe

transactions.In2022,theinter-provincialelectricity

spotmarketaccumulated27.8bnkWhofelectricity

tradedthroughouttheyear(2.7%ofthetotal),18

andthemaximumpowertradedonasingleday

exceeded19GW.19

Thetradingofauxiliaryservicesisapartofthe

long-termandspotmarkets,mainlyincluding

servicessuchaspeaking,frequencyregulationand

standby.Bytheendof2022,China’spowerauxiliary

serviceshadachievedcompletecoverageofsix

regionsand33provincialanddistrictgrids,leading

totheestablishmentofaunifiedauxiliaryservice

rulesystem.Inadditiontoconventionalpower

sources(i.e.fossil,nuclear,hydro,windandsolar),

18provincialgridcompanieshavepromotedenergy

storage,virtualpowerplantsandothernewmarket

playerstoparticipateintheauxiliaryservicemarket.

In2022,throughthemarket-basedmechanismof

auxiliaryservices,thesystemregulationcapacity

ofmorethan90mKWhasbeentapped,andmore

than100bnkWhofadditionalgenerationcapacity

fromcleanenergyhasbeenpromoted.20

16ChinaElectricityCouncil,AbriefoverviewofthenationalelectricitymarketfromJanuarytoDecember2022.2023.

/detail/index.html?3-317500

17ChinaElectricityCouncil,ChinaPowerIndustryAnnualDevelopmentReport2023(ShortVersion),

/detail/index.html?3-322625

18TMTPOST,China’sinter-provincialelectricityspotmarkettraded27.8billionKWHofelectricitylastyear.2023.

/nictation/6481381.html

19TMTPOST,China’sinter-provincialelectricityspotmarkettraded27.8billionKWHofelectricitylastyear.2023.

/nictation/6481381.html

20NationalDevelopmentandReformCommission,Makemoregreenelectricityavailableandwellused.2023.

/fggz/hjyzy/tdftzh/202305/

t20230504_1355444.html

12

1.3.Publicsectorandpolicy

TheobjectivesofpeakingcarbonemissionsandreachingcarbonneutralitynecessitatefurtherdecarbonisationofChina’spowersector.Inthis

transformationprocess,governmentdepartmentsplayaninstrumentalrole,servingasoneofthekeydriving

forcesinthepromotionoflow-carbonadvancementswithintheelectricalindustry.Consistentwiththose

targets,numerouspolicieshavebeenenactedin

recentyearstobolstertheshifttowardsalow-carbontrajectorywithinChina’spowersector.

Powermarketreform

Fordecades,China’spowersectoroperatedundercompleteregulation.However,itisnowtransitioningtowardsliberalisation.Since1985,thecountry

haslaunchedreformstoaddressvariousissuesat

differentstageswithinthepowersystem.In2015,theestablishmentofmid-long-termandspotmarketsandpricingreformweresetoutasmainobjectivesinthe

CentralCommitteeandStateCouncil’sDocumentNo.9,SeveralOpinionsonFurtherDeepeningtheReformoftheElectricitySystem.

Asof2022,market-basedtransactionsaccounted

for60%ofthetotalsocietalelectricityconsumption.21Thisreformofthepowermarketplaysapivotalroleinsupportingthelow-carbontransitionofChina’spowergenerationmix.

Sincethereform,thepricingequationfortheelectricitytradedinthemarketshasevolvedto:

Fixedprices+transmissionanddistributiontariff+governmentfundsandsurcharges=electricityprice

Intermsofthefixedprices,therearetwomain

categories:oneinvolvespricesnegotiatedbetweenpowergenerationcompaniesandlarge-scale

electricityusers,andtheotherpricessetbythenationalgovernment.Inthesecondcategory,specificprices

varyindifferentregionsandpowersources.China

calculatesthetransmissionanddistributiontariffusingapre-setformula.Specifically,permittedrevenue,

whichisdeterminedbyafixedreturnrateontheassetbasepluspermittedcosts,isdividedbythepre-set

volumeforthesubsequentthreeyears.22Governmentfundsandsurchargesareincorporated