China unveiled a groundbreaking policy on February 9, 2025, to accelerate its green transition by fully integrating wind and solar energy into the electricity market. The National Development and Reform Commission (NDRC) and National Energy Administration (NEA) announced plans to replace state-set energy prices with market-driven pricing – a move experts say will reshape the country's $1.5 trillion renewable sector.
Powering the Carbon Neutrality Agenda
With wind and solar capacity exceeding 1.2 billion kilowatts (35% of total power generation), China's renewable sector has outgrown its subsidy-driven model. The new 'market pricing + differential settlement' system aims to balance stability and competition, ensuring returns for existing projects while pushing new developments to innovate.
Market Forces Meet Climate Goals
'This reform isn't just about pricing electrons – it's about creating financial incentives for grid flexibility and storage solutions,' explains Wang Peng, a governance researcher at Huazhong University of Science and Technology. The change comes as China works toward its 2030 carbon peak and 2060 neutrality targets, with renewable investments growing 18% annually since 2020.
Global Implications
As the world's largest renewable energy market, China's policy shift could influence clean tech trends worldwide. The move aligns with growing demand from international investors – 67% of whom now prioritize ESG-compliant energy projects according to recent BloombergNEF data.
Reference(s):
cgtn.com
