Analysis of Global Power Market

Analysis of China's Power Operation Market Policies and Regulation (2/5) Key Policies and Regulations of Power Operation Market in China Issuing Time Issuing Authorities Industry Guideline 2019.09.26 State Council 2019.01.07 NDRC, NEA 2018.12.29 NPC 2018.11.13 NEA 2018.10.30 NDRC 2018.06.24 State Council Decisions of Standing committee of the State Council Meeting on September 26th, 2019 《2019年9月26日国务院常务委员会会议决议》 Notice on Actively Promoting the Work concerning Subsidy-free Grid Parity for Wind Power and Photovoltaic Power Generation 《关于积极推进风电、光伏发电无补贴平价上网有关工作的通知》 Electric Power Law of the People's Republic of China (2018 Amendment) 《中华人民共和国电力法(2018修正)》 Notice on the Implementation of Renewable Energy Power Quota System 《关于实行可再生能源电力配额制的通知》 Clean energy absorption action plan (2018-2020) 《清洁能源消纳行动计划(2018-2020)》 Opinions on Comprehensively Strengthening Ecological and Environmental Protection and Resolutely Fighting for Pollution Prevention and Control 《关于全面加强生态环境保护坚决打好污染防治攻坚战的意见》 FROST & Key Contents Starting at January 1st, 2020, for part of the power output of coal-fired generators, which is not included in the market-based electricity transactions, the linked pricing of coal and electricity will be canceled. The current benchmark on-grid pricing mechanism will be replaced by market- based system of benchmark price and floating price. Local governments should summarise the experience and promote the grid parity of wind power and photovoltaic power pilot projects, combined with resources and new technologies. Power grid enterprises should ensure full use of the output from wind power and photovoltaic power projects and monitor the abandoned wind and solar energy. Governments encourage the development of non-subsidy projects of wind power and photovoltaic power. The power industry should meet the needs of the development of the national economy and the society, and should therefore develop slightly ahead of the other sectors of the economy. The government encourages adoption of advanced scientific, technical and managerial methods for construction, generation, supply and use of electric power and shall give awards to those units and individuals have achieved remarkable successes in research, development and adoption of advanced scientific, technical and managerial methods. File has been clear about how the renewable energy power quotas will be implement and calculated Meanwhile, the file announced the provincial renewable power quotas and the provincial renewable power quotas of non- hydropower renewable energy electricity quotas, which were divided into binding and some bonus By 2020, the national hydropower utilisation rate should reach above 95%; the national average wind power utilisation rate should strive to achieve 95%, while the wind power curtailment rate to be controlled at a reasonable level, i.e. at around 5%; the national average solar power utilisation rate should be higher than 95%, while the solar power curtailment rate to be under 5%. It proposed to increase the use of clean energy, broaden the channels of clean energy consumption, and implement the policy of full guarantee purchase of renewable power generation Source: NPC, NDRC, NEA, Frost & Sullivan SULLIVAN 64

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