China to pilot electricity spot markets

According to Jiemian, China is entering a new stage of power market reforms to target widespread renewable energy curtailment. The National Development and Reform Commission (NDRC) issued the “Notice on Launching the Spot Power Market Pilot Programme” at the end of August, outlining reforms. These will reconfigure China’s current inefficient system of allocating operating hours to power plants annually. In its place, pilot areas will introduce spot markets such that power generators will sell to grid companies on a much shorter timeframe including day before and intra-day markets. The spot market will allow renewables to compete with conventional power plants because renewables offer lower priced electricity when active. By pricing electricity in real-time, rather than a year ahead, renewables can outcompete power from thermal generation. Other reforms to be introduced under the programme include optimising dispatch and cross-provincial load balancing.