China plans to launch inter-provincial power trading by year-end
By Colleen Howe
BEIJING, Nov 2 (Reuters) - China will formally launch inter-provincial spot power trading by the end of the year and pilot more regional electricity grids as it looks to build a national spot market by 2030, the country's economic planner said on Thursday.
After initial trials, the inter-provincial power trading market will open for continuous settlement operations by the end of 2023, according to a document published by the National Development and Reform Commission (NDRC).
Inter-provincial trades made up less than 1% of market-traded electricity in 2022, researchers from Energy Foundation China said in September. Most of those transactions were based on longer-term contracts, rather than supply and demand factors.
The news signals that NDRC is accelerating the construction of the spot electricity market and deepening power sector reform, said Xuewan Chen, an energy transition analyst at LSEG.
The NDRC said the Beijing-Tianjin-Hebei regional power market in northern China will start trial operations by June 2024, and called for accelerating the construction of the Yangtze River Delta electricity market.
The document also announced plans for additional regions to pilot spot trading at the provincial level, which began in 2019 but is currently only available in about half of provinces.
Fujian province in southeastern China is finalising plans for its market structure and will start a spot trading pilot before the end of 2023, the NDRC said.
Zhejiang province will begin trials before June 2024.
Several other regions - including Liaoning, Jiangsu, Anhui, Henan, Hubei, Hebei, Jiangxi, and Shaanxi provinces - will make efforts to pilot spot trading by the end of 2023, the document said.
Sichuan province is still developing a model for its spot market to incorporate high levels of hydropower generation during the rainy season, the agency said, without giving a timeline.
China aims by 2030 to fully merge its six regional grids into a unified national electricity market, with spot trading between provinces, allowing for a quicker response to supply and demand changes.
In late September, China issued trial rules for the national power market, focusing on developing technical systems and standardising market price limits and operational requirements. (Reporting by Colleen Howe. Editing by Gerry Doyle)