CNOOC signed 100 GWh of green electricity PPAs

CNOOC Oil & Petrochemicals Co. Ltd., the refining arm of China National Offshore Oil Corp. (CNOOC) in Huizhou, Guangdong province, has signed green electricity PPAs (power purchase agreements) worth 100 GWh in 2022. This is by far the largest deal for green power for one single power user in Guangdong. The agreement is composed of 38 GWh in a bilateral forward contract and 62 GWh in monthly bidding contracts.

This is the second green electricity procurement of CNOOC Huizhou. Indeed, CNOOC-Shell Petrochemical Co.,Ltd. (a joint venture between CNOOC and Royal Dutch Shell based in Huizhou) purchased 1 GWh of green electricity on the Guangdong green electricity market at the end of 2021.

All CNOOC green electricity has been bought via its power trading subsidiary CNOOC Power Investment Co.,Ltd. Its business scope includes power brokerage, integrated energy service, power investment, etc.

According to the Guangdong Power Exchange, the average trading price of renewable energy yearly contracts in 2022 reached 513.89 CNY / MWh, which is ~3% higher than the thermal power trading price (497 CNY / MWh).

In China, green electricity PPAs, distributed renewable power, CCER, and other on-site decarbonization retrofits are the key measures to reduce the carbon emission within one entity’s boundary. As carbon emissions were first monitored and controlled in the power generation industry back in 2021, CEA (Carbon Emission Allowance) trading volume reached 189 million tons. The latest transaction in March 18 2022 closed at 58 CNY/ton (~8 euro/ton).

It is expected that later this year or early next year, the Chinese government will add other key high emissions sectors to the GHG emission control system in pilot provinces such as Guangdong, Shandong, Zhejiang, or Hebei. This includes petrochemicals, chemicals, iron & steel, construction materials, nonferrous metals, and other sectors. In consequence, market transactions of green electricity, CEA, and CCER are anticipated to be even more active by then.

(Huizhou Daily; MEE; Guangdong Power Exchange)

CNOOC logo
Share this article: