The fifth anniversary of China’s new electricity market reform: an overview and enlightenment of subsidy mechanism for high-cost units

Abstract

With the continuous deepening of China‘s electricity market reform, the problem that units with different costs compete in the same plat has become increasingly prominent. In the transitional period of market reform without capacity market, it is urgent to design a reasonable and effective subsidy mechanism for high-cost units to ensure their survival. This paper first summarizes the common subsidy mechanisms in China, and then introduces the design of subsidy mechanism for high-cost unit participation in the market in Guangdong, Zhejiang and Yunnan provinces. Finally, comparing the advantages and disadvantages of the above three subsidy mechanisms, the design idea of participating in market competition for high-cost units is given.

A Novel LCOE Pricing Model for Renewable Energy with Power Purchase Agreement: A Case Study in China

“…Since China launched the latest round of electricity reform in 2015, it has gradually deepened the marketization of its power sector, and formed a medium-and long-term trading-oriented pattern supplemented by spot trading. Currently, the first batch of spot trading pilot projects has completed a trial operation of settlement; most provinces vigorously promote the development of spot and ancillary services markets [7,8]. However, the mechanism of renewable energy trading is not clear, so supporting policies for renewable power and its trading mechanisms have become research topics [9].…”