| Work Detail |
China’s National Energy Administration has introduced a new set of measures to support peer-to-peer energy trading. The new initiatives are expected to remove barriers to the development of distributed photovoltaic energy projects.
Chinas National Energy Agency (NEA) has released a new policy to support peer-to-peer electricity sales and energy flexibility services.
The new “Guidelines for Supporting Innovative Development of New Business Entities in the Electricity Sector,” published on December 5, define two categories of new market players in the electricity sector: technology-specific entities and resource aggregation entities.
Technology-specific entities are operators of distributed energy sources such as solar PV, decentralized wind energy, and energy storage plants. Resource aggregation entities include operators of virtual power plants and smart microgrids that cohesively manage diverse energy assets.
Under the new guidelines, qualified operators can be exempted from obtaining conventional electricity business licenses, lowering barriers to entry and opening up opportunities for innovation in electricity services. For example, the policy allows for the sale of electricity “over the fence,” allowing companies to sell power from distributed solar systems to customers outside their immediate premises, but within the same distribution network area.
The guidelines also encourage local consumption of renewable energy by allowing direct connections between renewable generators and consumers. This could reduce reliance on centralized grid infrastructure, addressing one of the last obstacles to the adoption of distributed solar energy.
To ensure system reliability, the policy sets four operational requirements for new market players: they must be observable, measurable, adjustable and controllable. It also encourages virtual power plants to aggregate distributed resources and provide essential services to the grid, such as demand response and frequency regulation.
According to the NEA, the new policies will encourage innovation and ensure fairness in cost sharing. New market entrants will be required to bear the costs of imbalance settlements, penalties for deviation, infrastructure usage fees and applicable government levies.
The guidelines also streamline registration, trading and settlement processes. Regional electricity trading agencies will establish registration categories and simplify application procedures for new entities. Settlement mechanisms will be tailored to the specific business models and commercial activities of these new players, ensuring financial security of transactions, according to the NEA.
Chinese analysts say the policy will remove remaining barriers to distributed PV projects, potentially unlocking significant market potential for this segment. By enabling innovative business models such as “over-the-fence” electricity trading and decentralized resource aggregation, the guidelines are expected to accelerate Chinese energy market reforms and the integration of renewables into the grid. |
