China is looking to modernize its renewable energy sector by leaving the prices of clean energy to the whims of the markets rather than being dictated by the government. China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) have issued a notice about deepening the “market-oriented reform” wherein the price of on-grid electricity generated from renewable sources such as wind and solar, previously fixed, would be determined by market mechanisms.
“With the large-scale development of new energy, the fixed pricing for on-grid electricity cannot accurately reflect market supply and demand and does not share its responsibility for regulating the power system,” the authorities said.
In an effort to balance the new market-driven pricing, Beijing will implement “balancing payments,” a system comparable to the UK’s contracts for difference. This mechanism ensures power…
