Core Viewpoint - The establishment of a normalized electricity trading mechanism between the State Grid and the Southern Grid marks a significant step towards optimizing energy distribution and achieving China's dual carbon goals, facilitating efficient nationwide flow of clean electricity [2][3][4]. Group 1: Mechanism Overview - The normalized electricity trading mechanism aims to connect renewable energy resources across the country, addressing the issue of energy asset fragmentation caused by administrative divisions [3]. - This mechanism is expected to enhance the utilization of renewable energy by allowing electricity to be sold to the lowest marginal cost users nationwide, thus shortening the path to carbon peak and carbon neutrality [3][4]. Group 2: Impact on Energy Structure - The mechanism will help optimize the energy structure by enabling the transfer of renewable energy from resource-rich western regions to economically developed eastern regions, reducing reliance on coal power [3][4]. - It creates a closed loop of "renewable energy development—cross-regional transmission—green electricity consumption," which strengthens the linkage between the carbon market and the electricity market [4]. Group 3: Addressing Energy Wastage - The mechanism provides a new approach to mitigate the long-standing issue of "abandoned wind and solar" energy, which arises from the mismatch between renewable energy generation and system absorption capacity [5][6]. - By expanding the market scope and optimizing scheduling, the mechanism significantly improves the utilization rate of renewable energy, allowing western wind and solar power to be transmitted to eastern load centers [6][7]. Group 4: Future Considerations - The sustainability of the mechanism relies on three key factors: the construction of flexible resource support, continuous expansion of cross-regional transmission channels, and the coordination of policies and market mechanisms [7][8]. - The mechanism's success will depend on addressing practical challenges such as unifying provincial electricity market rules and improving the accuracy of renewable energy forecasting [10][11].

Core Viewpoint - The establishment of a normalized cross-grid electricity trading mechanism aims to enhance electricity supply security during peak summer periods and facilitate long-term green electricity trading agreements across different grid operating areas [1][2][3]. Group 1: Reasons for Establishment - The current separation between the State Grid and Southern Grid has become a critical bottleneck in building a unified national electricity market [3]. - The lack of a normalized trading mechanism between the two grids has limited the efficiency of inter-grid electricity exchanges, which primarily rely on government agreements and emergency dispatch [3][4]. - The increasing integration of renewable energy sources necessitates a more flexible and efficient electricity trading system to ensure stable supply and consumption across regions [3][5]. Group 2: Mechanism Details - The approved plan includes detailed processes for various trading types, ensuring safety checks, execution, settlement, and information disclosure for cross-grid transactions [4]. - A dual verification system is established for all cross-grid transactions to ensure the safety and reliability of the electricity grid [4][7]. - The plan promotes real-time sharing of transaction data, enhancing the convenience for market participants and reducing transaction costs [4][6]. Group 3: Innovations and Market Impact - The plan introduces a direct trading model between resource providers and consumers, allowing renewable energy projects to participate in cross-grid trading [6]. - It aims to expand the market for green electricity, facilitating the transfer of clean energy from resource-rich areas to consumption centers [6][5]. - The establishment of a collaborative mechanism between the two grids is essential for the smooth operation of the trading system, ensuring unified processes and safety standards [7][8].

Core Viewpoint - The report highlights significant progress in the construction of China's unified electricity market in 2024, emphasizing the establishment of various market mechanisms and the promotion of clean energy, with a focus on achieving a unified, efficient, and sustainable future for the energy system by 2025 [4][6]. Group 1: Overview of the 2024 Electricity Market - In 2024, the total installed power generation capacity reached 3,349 million kilowatts, with an increase of 429 million kilowatts, of which wind and solar power accounted for 358 million kilowatts, representing a year-on-year growth of 33.9% [9][10]. - The total electricity generation in 2024 was 10.09 trillion kilowatt-hours, a year-on-year increase of 6.7%, with wind and solar contributing 3,660 billion kilowatt-hours, accounting for 58.1% of the total increase [11][12]. - The total electricity consumption reached 9.85 trillion kilowatt-hours, growing by 6.8% year-on-year, with an average annual growth rate of 6.6% from 2016 to 2024 [13]. Group 2: Market Progress and Achievements in 2024 - The number of market participants increased to 816,000, a year-on-year growth of 8.9%, with 35,000 power generation companies and 774,000 electricity users [17]. - The total market-based electricity trading volume reached 6.18 trillion kilowatt-hours, a 9.0% increase, accounting for 62.7% of total electricity consumption [20][22]. - Cross-provincial and cross-regional medium- and long-term trading volume reached 1.39 trillion kilowatt-hours, a year-on-year increase of 19.8% [28]. Group 3: Market Mechanism and Structure - The inter-provincial electricity spot market officially commenced operations on October 15, 2024, covering the entire national grid and promoting inter-provincial electricity mutual assistance [43]. - The inter-provincial spot market recorded a total transaction volume of 37.631 billion kilowatt-hours in 2024, with an average transaction price of 0.412 yuan per kilowatt-hour [44]. - The southern regional electricity market achieved significant progress, with over 200,000 registered market participants and a market-based electricity volume accounting for 72.5% of total sales [50]. Group 4: Regulatory and Rule System Development - The basic rule system for the electricity market was initially established, including the issuance of fundamental rules for market operation, information disclosure, and registration [73][74]. - The green electricity market saw a substantial increase, with green certificate transactions reaching 446 million, a year-on-year growth of 364% [76]. - The auxiliary service market expanded, with total costs amounting to 40.25 billion yuan, and the average cost per kilowatt-hour for users was 0.0008 yuan [68]. Group 5: Future Outlook for 2025 - The unified electricity market is expected to be initially established by 2025, serving as a platform to gather consensus and address reform challenges [6]. - The report emphasizes the need for continued efforts to enhance market efficiency and sustainability, supporting the transition to a clean, low-carbon energy system [6].

Core Viewpoint - The article highlights the significant increase in electricity demand during the summer peak season in China, driven by high temperatures and economic growth, with expectations of a year-on-year increase of approximately 100 million kilowatts in peak load [1] Group 1: Electricity Supply and Demand - The central enterprises are identified as the main force in ensuring energy supply during the summer peak, with the State-owned Assets Supervision and Administration Commission urging them to contribute to stable economic growth and public comfort [1] - The National Energy Group has initiated measures to ensure power supply, including the commissioning of a new coal-fired power unit that incorporates advanced technologies, enhancing the overall efficiency of electricity generation [2] - As of mid-July, the National Energy Group reported a power generation of 1,523.9 billion kilowatt-hours, reflecting a year-on-year increase of 3.3%, with coal production reaching 74.26 million tons, up 1.7% [2] Group 2: Renewable Energy Integration - Wind and solar power are increasingly becoming the main sources of new electricity generation, with installed capacities reaching 570 million and 1.08 billion kilowatts respectively, accounting for 45.7% of total installed capacity, surpassing coal-fired power [2] - The article emphasizes the need for high-level integration and consumption of renewable energy as a key aspect of building a new energy system [2] Group 3: Infrastructure and Market Developments - The Hami-Chongqing ±800 kV UHVDC project has successfully delivered over 1 billion kilowatt-hours of electricity since its commissioning, significantly supporting the power supply in Chongqing [4] - The "Xinjiang Power to Chongqing" project is expected to inject over 36 billion kilowatt-hours of clean electricity into the Chongqing grid by the end of the year, equivalent to one-fifth of the city's annual electricity consumption [7] - A new cross-regional electricity trading mechanism has been established, facilitating the transfer of over 2 billion kilowatt-hours of electricity from Guangdong, Guangxi, and Yunnan to eastern provinces, marking a significant step towards a unified national electricity market [8]

Core Viewpoint - The implementation of the new cross-grid electricity trading mechanism will significantly alter the landscape for electricity sales companies, leading to a larger market, more players, faster pace, and more complex rules, ultimately increasing profit opportunities and requirements for companies [1][26]. Summary by Sections National Unified Electricity Market - A new important document was released on July 14 by the National Development and Reform Commission (NDRC), marking a significant breakthrough in electricity system reform and a key step in building a national unified electricity market [2]. - The document outlines a cross-grid trading mechanism that aims to break market segmentation and achieve "soft connectivity" between the State Grid and Southern Grid [2][9]. Trading Mechanism Details - The mechanism includes detailed designs for various trading types, safety checks, execution principles, and information sharing [2][3]. - It sets short-term, medium-term, and long-term goals for integrating trading within and across the two grids [3][9]. Impact on Electricity Sales Companies - Following the announcement, many electricity sales companies began preparing to understand the implications for their future operations [4]. - Companies that fail to upgrade their systems within 1-2 years may be forced to retreat to regional retail or transform into service providers [4][20]. - Leading companies can leverage their national business layouts to engage in large-scale cross-regional trading, enhancing their market opportunities [4][20]. Market Dynamics and Trading Opportunities - The new scheme will increase the variety of trading products and shorten trading cycles, providing more options and profit points for market participants [22][25]. - The transition from annual and monthly trading to continuous trading on working days will require companies to enhance their algorithmic trading and real-time risk management capabilities [25][26]. Regulatory and Structural Changes - The scheme addresses the historical market segmentation between the State Grid and Southern Grid, filling a regulatory gap for cross-grid trading [9][10]. - It promotes a principle of "one registration, nationwide sharing," allowing companies to operate across different regions without the need for multiple registrations [15][20]. Future Outlook - By 2025, the market is expected to see more market-based trading methods and a reduction in trading cycles, catering to the green consumption needs of electricity users [7]. - The long-term vision includes achieving a unified market with fair competition and optimized resource allocation across the country by 2030-2035 [9].

Core Viewpoint - The article discusses the significant breakthrough in China's electricity market with the approval of the "Cross-Grid Operating Area Normalized Electricity Trading Mechanism Plan," which allows for the seamless flow of electricity resources across the national grid, marking a step towards a unified national electricity market [1][3]. Group 1: Market Structure and Historical Context - Historically, China's electricity market has been divided between the State Grid and the Southern Grid, with the State Grid covering 26 provinces and accounting for over 88% of the land area, while the Southern Grid operates in five provinces [3]. - This regional division has led to market isolation, preventing efficient electricity transfer between regions, especially during peak demand or surplus generation periods [3][4]. Group 2: Mechanism Implementation and Transactions - The first transaction under the new mechanism involved 2 million kilowatts of electricity flowing from the Southern Grid to the Eastern region, showcasing the mechanism's role in optimizing national electricity resource allocation [1]. - In March, a successful cross-regional green electricity transaction was conducted, marking a significant milestone in the establishment of a normalized trading mechanism [4]. - In June, over 34 million kilowatt-hours of renewable energy were traded across multiple channels, demonstrating the mechanism's ability to enhance market competition and resource efficiency [5]. Group 3: Future Goals and Framework - The plan outlines a phased approach to building a unified electricity market, focusing on foundational improvements, expanding participation, and ultimately achieving rule unification and comprehensive integration [6][7]. - The "Take the Smaller Principle" is a key innovation in ensuring safety and efficiency in transactions, allowing for better coordination between the two grid operators [8]. Group 4: Economic and Environmental Impact - The implementation of this mechanism is expected to significantly enhance market vitality and expand market space, allowing for efficient resource flow and optimization across the country [10]. - It aims to improve the consumption of clean energy by creating stable channels for renewable resources from regions like Southwest China to major consumption areas [10][11]. - The establishment of long-term green electricity purchase agreements is anticipated to stabilize market expectations and drive efficient resource conversion into economic advantages [11][12].

Core Viewpoint - The establishment of a cross-grid trading mechanism marks a significant step towards building a unified national electricity market in China, facilitating the integration of electricity resources across different regions and enhancing power supply security [2][4][11]. Group 1: Cross-Grid Trading Mechanism - The National Development and Reform Commission and the National Energy Administration have approved a plan for a normalized electricity trading mechanism between the State Grid and Southern Grid, which will support power supply during peak summer periods and explore long-term green electricity trading [2][4]. - The cross-grid trading mechanism aims to eliminate barriers between the two electricity markets, allowing for market-based operations rather than relying solely on planned dispatch [4][5]. - The mechanism includes a detailed design for transaction organization, safety checks, and execution processes, introducing an "one registration, nationwide sharing" model for market participants [6][8]. Group 2: Market Transformation - Since the reform initiated in 2002, the electricity sector has transitioned from a planned economy to a market-oriented one, with market-based electricity transactions increasing from 1.1 trillion kWh in 2016 to an expected 6.2 trillion kWh in 2024, representing a rise from 17% to 63% of total electricity consumption [3][9]. - The cross-grid trading mechanism is expected to enhance the efficiency of electricity resource allocation nationwide, allowing for better integration of renewable energy sources [5][10]. Group 3: Green Electricity Trading - By the end of 2024, China's renewable energy generation capacity is projected to reach 1.45 billion kW, surpassing that of thermal power, with over 50% of renewable energy being consumed through market transactions [9][10]. - The new mechanism will facilitate the regular trading of green electricity, with significant transactions already taking place, such as the first cross-regional green electricity trade completed in March 2024 [10][11]. - The establishment of this trading mechanism is seen as a key solution to the challenges of integrating renewable energy into the grid, particularly in balancing supply and demand across different regions [9][10].

Core Viewpoint - The establishment of a normalized electricity trading mechanism across different grid operation areas marks a significant step towards building a unified national electricity market in China, facilitating the efficient flow and optimization of electricity resources nationwide [1][5][10]. Group 1: Market Structure and Changes - The electricity market in China has historically been divided between the State Grid and the Southern Grid, which has led to market isolation despite physical connections [2][3]. - The new trading mechanism allows for the seamless flow of electricity resources across these two major grids, overcoming previous market segmentation and enhancing the utilization of transmission channels [2][5]. Group 2: Implementation and Mechanism - The plan outlines a phased approach to establish a cross-grid trading mechanism, starting with foundational work and gradually expanding to a fully integrated system [5][6]. - Key features of the mechanism include differentiated trading rules for various scenarios, ensuring efficient resource allocation while maintaining operational flexibility [6][7]. Group 3: Economic and Environmental Impact - The normalized trading mechanism is expected to significantly enhance market vitality and expand market space, allowing diverse power generation resources to flow efficiently across the country [8][9]. - It aims to improve the consumption of clean energy by creating stable and efficient channels for hydropower and wind resources to reach high-demand areas, addressing issues of resource wastage [8][9]. Group 4: Future Developments - The government plans to construct more cross-grid transmission channels to further enhance the interconnectivity and mutual support of electricity resources, promoting the large-scale development of renewable energy [10]. - The mechanism is seen as a crucial step towards achieving a clean, low-carbon, and efficient modern energy system, reshaping the green landscape of China's economy [10].

Core Viewpoint - The establishment of a normalized electricity trading mechanism across grid operating areas is a significant step towards building a unified national electricity market in China, which will enhance resource allocation and break market segmentation [1][4]. Group 1: Electricity Market Development - The electricity market in China has transitioned from a planned system to a market-oriented one, with market transactions expected to exceed 6 trillion kilowatt-hours in 2024, accounting for 63% of total electricity consumption [2]. - The current electricity market structure has been shaped by ten years of reform, leading to a multi-layered and multi-functional market system [2]. Group 2: Cross-Grid Trading Mechanism - The new trading mechanism aims to unify market rules, trading varieties, and trading timing between the State Grid Corporation and the Southern Power Grid by the end of this year, facilitating normalized cross-grid trading [1][4]. - The mechanism will create a "national online electricity mall," allowing trading entities to operate across grid areas under a unified set of rules, thus enabling free flow of electricity resources nationwide [5][6]. Group 3: Support for Electricity Supply - The cross-grid trading mechanism is crucial for ensuring stable electricity supply, especially during peak demand periods in summer, as it enhances the ability to match supply and demand effectively [7]. - The plan includes short-term, medium-term, and long-term goals for cross-grid trading, with immediate actions to establish regular trading cycles and support green electricity transactions in key regions [7].

Core Viewpoint - The establishment of a normalized electricity trading mechanism across power grid operating areas in China aims to accelerate the construction of a unified national electricity market, enhancing the free flow of electricity resources nationwide [1][3]. Group 1: Trading Mechanism - The new trading mechanism breaks down barriers between the two major power grid operating areas, allowing for clear trading rules for various types of electricity, including long-term, green power, and spot trading [3][5]. - Cross-grid trading will not incur transaction fees, and electricity prices will fluctuate according to market conditions, preventing significant price volatility [4]. Group 2: Green Power Expansion - The normalized trading mechanism will significantly expand the trading space for green electricity, facilitating better absorption of renewable energy [6][8]. - Green electricity is recognized as a key component of the trading mechanism, allowing renewable energy projects to be treated as basic units for green power trading [8][10]. Group 3: Implementation and Infrastructure - The trading mechanism will rely on the Fujian-Guangdong interconnection project to facilitate cross-operating area electricity trading, which has already demonstrated success with the first cross-operating area green electricity transaction [12][14]. - From July 1 to September 15, the interconnection will support electricity supply to East China, with expected total electricity deliveries from Guangdong to Fujian at 892 million kilowatt-hours [14]. Group 4: Future Outlook - In the long term, as cross-regional transmission projects are put into operation, the trading range will gradually expand, creating a new pattern for the free flow of electricity resources across the country [16].