China's inter-provincial electricity spot market officially began operation on Tuesday, the latest step towards building a unified electricity market system to enable optimized power resource allocation, the State Grid announced.
Building on the existing medium- and long-term electricity trading mechanism, the spot market allows for day-ahead and intra-day transactions across provinces. Since the pilot use started in January 2022, the market has been running smoothly and steadily for 31 consecutive months.
Up to date, it has achieved full coverage of areas operated by the State Grid and the western Inner Mongolia Autonomous Region, with over 6,000 trading entities and a cumulative transaction volume of over 88 billion kilowatt-hours, of which more than 44 percent are clean energy sources.
"The inter-provincial electricity spot market can effectively reflect market supply and demand, forming a market-driven price mechanism with fluctuating prices pointing to the spatial and temporal value of electricity," said Wang Delin, deputy chief engineer at the National Electric Power Dispatching and Control Center.
Additionally, the formal operation of the inter-provincial electricity spot market will contribute to the transition to green energy. The utilization rate of new energy increased by one percentage point during the first eight months of this year when the market was in trial operation.
"China's installed capacity of renewable energy has grown rapidly, maintaining the world's largest scale for several consecutive years. The inter-provincial electricity spot market plays a positive role in facilitating new energy consumption," said Yang Kun, executive vice chairman of the China Electricity Council.
"In the 'Three North' regions (northwest, north and northeast China) rich in new energy resources, there are times when consumption is insufficient, while the terminal power grid in eastern regions still has power absorption capacity. The inter-provincial spot electricity trading can effectively balance supply and demand between provinces," Yang explained.
The introduction of the inter-provincial electricity spot market marks a new milestone in the construction of China's multi-tiered, unified electricity market system.
In parallel to the inter-provincial market, there are also intra-provincial power trading platforms across the country. Within the State Grid operating area, 23 provincial-level electricity spot markets have completed test operation or are still in trial operation, aiming to optimize the allocation of electricity resources within provinces and ensure a balance between supply and demand.
Faced with a growing demand for cross-regional resources allocation, the country has started to establish an inter-provincial electricity spot market, which played a crucial role during this summer when some economically developed provinces were grappling with soaring power consumption amid heatwaves, with a maximum transaction volume of 12.85 million kilowatts.
"After being put into official operation, the inter-provincial electricity spot market will promote the flow of electricity and energy across provinces on a larger scale. For the first time in China's power history, the inter-provincial and intra-provincial spot markets have been operating simultaneously and coordinately, marking a new milestone in the construction of a multi-tiered, unified electricity market system," said Wang.
China officially starts inter-provincial trading of spot electricity
China officially starts inter-provincial trading of spot electricity
