Interpreting the "Implementation Opinions on Improving the National Unified Electricity Market System"

Recently, the General Office of the State Council issued the "Implementation Opinions on Improving the National Unified Electricity Market System." Why were these opinions issued? What key tasks have been outlined in the opinions? On the 11th, a relevant official from the National Development and Reform Commission provided an interpretation.

Question: What is the background and significance of the issuance of these opinions?

Answer: The national unified electricity market system is a crucial indicator of the construction of a national unified market and an important achievement in deepening the reform of the electricity system. Building a national unified electricity market system is not only a key support for constructing a new power system, optimizing the allocation of electricity resources, and ensuring the secure and stable supply of energy but also an inevitable requirement for advancing the construction of a national unified market and a fundamental element for promoting steady economic growth.

In recent years, the Central Committee of the Communist Party of China and the State Council have put forward new requirements for advancing the construction of a national unified market and accelerating the establishment of a new power system. The methods of electricity production, consumption patterns, and industrial structure have undergone significant changes, with the proportion of new energy continuously increasing and new models and scenarios rapidly emerging. Economic development and people's livelihoods demand higher requirements for electricity costs and reliability, posing new challenges to the electricity market. There is an urgent need to further improve the electricity market system through reform and innovation. Standing at a new historical starting point, the opinions address the new situation, circumstances, and requirements, outlining key tasks for improving the national unified electricity market system over the next 5 to 10 years.

Question: What are the overall requirements set forth in the opinions for improving the national unified electricity market system?

Answer: The opinions emphasize the need to adhere to national unity and smooth circulation, strive to break market segmentation and regional barriers, promote efficient market connectivity and organic integration, and coordinate efforts to achieve a high-level dynamic balance between supply and demand in the electricity market. Efforts should focus on expanding scale, improving structure, and extending functions to establish a unified, open, competitive, orderly, secure, efficient, and well-governed electricity market system. On the basis of ensuring the safe and reliable operation of the power system, the goal is to achieve smooth and orderly market operation, unified and efficient trading rules, and fair and reasonable distribution of benefits, providing strong support for ensuring energy security, economic and social development, and the green and low-carbon transition.

Question: What key tasks and innovative measures are proposed in the opinions?

Answer: The opinions focus on deploying 19 key tasks across five areas: promoting the optimal allocation of electricity resources nationwide, improving the various functions of the electricity market, facilitating equal and broad participation of all types of market entities, constructing a nationally unified electricity market institutional system, and strengthening policy coordination. In particular, the following innovative measures are proposed:

First, optimizing the implementation path for the national unified electricity market system. For the first time, the opinions propose that markets at all levels should gradually transition from "independent bidding and trading" to "unified bidding and joint trading," exploring feasible methods for voluntary integration or fusion of adjacent provincial markets. Specific requirements are also put forward for the coordination mechanisms between different types of markets, such as spot, medium- and long-term, ancillary services, and capacity markets.

Second, improving the cross-provincial and cross-regional electricity trading system. This includes promoting regular cross-grid market transactions, increasing the scale of cross-provincial and cross-regional power transmission and the proportion of clean energy transmission, enhancing multi-channel centralized optimization, integrating the construction and operation of the Southern Regional Electricity Market, improving power exchange in the Yangtze River Delta, and further advancing the nationwide interconnection of electricity markets to facilitate the large-scale circulation of electricity resources.

Third, exploring the establishment of a capacity market. Supporting and regulating resources such as coal power, pumped storage, and new energy storage play a vital role in promoting the integration of high-proportion new energy and building a new power system. To ensure their returns, the opinions propose establishing a reliable capacity compensation mechanism in an orderly manner, supporting regions with the necessary conditions to explore capacity markets, using market-based means to guide the orderly development of supporting and regulating power sources, ensuring long-term adequacy of system capacity, and enhancing the ability to guarantee supply.

Fourth, facilitating better participation of new energy in the electricity market. Based on national conditions, differentiated market entry paths are proposed for various forms of new energy projects, such as large-scale desert, Gobi, and wasteland bases, and distributed new energy. Aligning with international standards, specific measures are introduced, including aggregated inter-provincial green electricity trading, multi-year green electricity contracts, and strengthened traceability of green electricity consumption, to better meet the green electricity consumption needs of export-oriented and foreign-invested enterprises. It is explicitly stated that, when conditions are mature, exploration of a two-part or single-capacity cross-provincial and cross-regional transmission pricing mechanism will be undertaken to accommodate large-scale new energy transmission.

Fifth, promoting greater participation of private enterprises in the electricity market. On one hand, for various new entities primarily composed of private enterprises, such as new energy storage, virtual power plants, and smart microgrids, the opinions propose measures to facilitate their flexible participation in market transactions, guiding them to invest rationally, operate standardly, and develop healthily. On the other hand, small and medium-sized industrial and commercial users currently purchasing electricity through grid agents can only accept market prices and participate indirectly in the market. For the first time, the opinions propose gradually achieving direct participation in the electricity market for all electricity users except those with guaranteed supply.

Sixth, improving the diversified governance system of the electricity market. To guide all parties to participate in market construction, ensure standardized and secure market operation, reduce regulatory costs, and enhance market governance efficiency, the opinions propose, for the first time, establishing a diversified market governance system. Government authorities will provide overall design for the electricity market, electricity regulatory agencies will conduct independent supervision in accordance with the law, market management committees composed of representatives from market entities will play a role in deliberation, coordination, and collaborative governance, and market operation agencies will provide trading services and conduct real-time monitoring of market operation risks.