Zhejiang proposal includes industrial roof projects; China plans single national electricity market by 2030
China is moving forward with plans to utilize more of its vast resources wind e solaras it progresses towards the full liberalization of the electricity market by the end of the decade.
In the province of Zhejiangone of the growth engines of the economy on China’s east coast, has drawn up a proposal to encourage commercial users to adopt less regulated energy use.
While fixed contracts, with prices set by the government, will continue to dictate 90% of the market, the other 10% will be open for spot trading, according to a consultation document from the Zhejiang Power Trade Center published by the news channel BJX.com.
Under the plan, generators wind e solar could opt for the market spot and compete for customers alongside coal power plants.
Participants would include smaller industrial and commercial rooftop projects, which have been more difficult to integrate into the network.
At times of peak demand, competition should help provide cheaper electricity to factories.
When energy supplies are abundant, fixed contract prices would act as a floor.
If successful, the trade spot — and the role played by renewables — could be gradually expanded, while fixed contracts would be reduced.
“The latest initiatives Zhejiang align with the broader market trend of driving commercial and industrial solar projects to participate in the energy market,” said Shannon Donganalyst at BloombergNEF.
“Under this market mechanism, it guarantees a set price for electricity and revenues for renewable projects.”
National Market
Other Chinese provinces are working on their 2025 energy trading plans.
Countries like the United Kingdom use similar programs to ensure the availability and profitability of clean energy.
The energies renewable in China they are increasingly cheaper than alternatives, following a huge increase in capacity, but they are not always fully employed because they cannot be reliable when there is no wind or sun, especially in a fragmented market.
The solution is to transmit renewable energy from where it is generated to where it is needed, regardless of the enormous distances involved. This would also help smooth out sharp swings in demand caused by China’s climate, which varies between scorching heat in summer and freezing cold in winter.
To achieve this goal, a single, national market is planned by 2030, which will enable the trading of electricity across the country on a near real-time basis. Meanwhile, the government needs to keep energy costs low and supplies predictable, especially for the manufacturing sector, which is already facing a slowdown in growth and expected to bear the brunt of worsening trade tensions with the US.
In this context, Zhejiang it’s just a stepping stone to a national market and a test case of what might work.
Other pilot projects have faced teething problems. In the southern manufacturing hub of Guangdongwhich is leading market liberalization, nearly half of energy suppliers barely broke even after tariffs fell below production costs, according to local press reports last month.
On the wire
A BRF SAone of the largest chicken suppliers in the world, expects Brazil to benefit from a potential trade war between the US and China when Donald Trump take power next year.
China’s economy has likely gained momentum over the past month, with early indicators pointing to a recovery after the government began implementing stimulus measures in late September.
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O Citigroup Inc. cut its near-term copper price forecast by 11% as likely increases in U.S. trade tariffs under Trump’s presidency Trump and weaker-than-expected stimulus from China could weigh on demand.
With information from Bloomberg
Source: https://www.ocafezinho.com/2024/11/14/china-lanca-plano-ousado-para-energia-solar/
