Energy Insider: China Releases Power System Reform Plan, Provinces Ordered to Use More Renewable Energy

The summary of the content is as follows:

China is making significant strides in climate and energy initiatives, with several new regulations and targets to support renewable energy adoption and reduce carbon emissions [para. 1][para. 2][para. 3][para. 4][para. 5]. One of the key developments is the release of an action plan to reform the power system over the next three years by the National Development and Reform Commission (NDRC), National Energy Administration (NEA), and the National Data Administration [para. 7]. This plan aims to enhance the power system's stability, improve long-distance transmission of renewable energy, and ensure the high-quality development of the power distribution network [para. 7]. The action plan is crucial for achieving China’s climate goals and ensuring long-term energy security [para. 9].

In another significant move, the central government has increased the renewable energy consumption targets for provinces this year and in 2025. This move reflects Beijing’s push for provinces to proactively adopt more green energy, targeting sectors like aluminum manufacturing to use a certain proportion of green electricity [para. 12][para. 13]. The increased targets indicate the central government's desire for regional governments to prepare for the next five-year planning cycle starting in 2026 [para. 14].

Additionally, the State Council has announced a work plan to limit carbon emissions from 2026. This new system will replace the current mechanism that controls energy consumption, focusing on carbon intensity and total carbon emissions as parameters [para. 19]. This system will help China align its domestic actions with its international commitments under the Paris Agreement, with future goals expected to cover the period until 2035 [para. 20][para. 22].

Meanwhile, Shanghai set new power demand records amid extreme heat, reflecting the city's high electricity consumption due to air conditioning [para. 23]. On August 2nd, the city's power grid reached a historical high of 40.3 gigawatts (GW) amidst a heatwave [para. 24]. The rising temperatures have significantly impacted electricity consumption, with nationwide records indicating the maximum electricity load surpassed 1,450 GW on July 24th [para. 25].

In the market, China has seen a record issuance of green electricity certificates (GECs) this year, bolstered by the increasing encouragement for companies to adopt power from non-fossil sources [para. 26]. Each GEC represents 1,000 kilowatt-hours of renewable energy, and they are traded through China’s green power trading market [para. 28]. In the first half of 2024, the NEA issued 486 million GECs, a 13-fold increase year-on-year. Concurrently, 39,000 companies and individuals participated in GEC trading, which saw a sixfold increase compared to the same period last year [para. 32]. The expansion of the GEC program last August to include all types of renewable energy projects, not just onshore wind and large solar power plants, marks a significant milestone in China’s energy transition [para. 36].

These steps indicate strong governmental commitment to ensuring energy security, pushing renewable energy adoption, and controlling carbon emissions, aligning with the country's climate objectives and international commitments [para. 7][para. 12][para. 19].