Corporate Net Zero Pathways: Anhui concludes the largest green electricity trading day without capping green electricity prices

The Anhui Power Exchange recently organized its first green electricity trading in 2022 , after the promulgation of the Rules and Regulations of the Green Electricity Trading Pilot in Anhui (hereafter: Anhui rules) at the end of August. On September 7, 27 wind and solar power generation companies and 21 power users and power trading companies concluded 0.829TWh of green power transactions through bilateral trading, which is the largest transaction volume in a single day among all the provinces that have organized green electricity trading so far. The 0.829TWh will support power users’ green power consumption from September to December 2022.

This is a second transaction organized in Anhui since the national green power trading pilot took place in September 2021. During the pilot trading last year, 11GWh of green power was traded at 404.4RMB/MWh in Anhui province.

The new Anhui rules issued in August have strongly impacted the latest transactions, as they have clearly specified certain key terms including the price range, transaction types, settlement, etc.

Green power prices can fluctuate within +-20% based on the coal-fired base price + green premium

Regarding the price range, Anhui rules indicate that the green power price comprises power price (value) and green premium. The power price can fluctuate within +-20% based on the coal-fired base price while the green premium has no limit. This is probably the first time that provincial rules stipulate that the power value of green electricity can have the same fluctuation range as thermal power. It sets a positive signpost for renewable energy projects given that green power prices are officially allowed to go beyond the coal-fired trading price range (+-20% of coal-fired base price + green premium). Some other provinces, such as Guangxi, have capped the entire green power price within 20% above the coal-fired base price. Some others like Fujian have anchored the green power price with the coal-fired base price.

Residual power can still be sold to the grid

For the time being, after deducting the power volume to be traded in the green electricity trading market, renewable power generation companies can sell their residual power to the local grid company at the coal-fired base price or participate in mid-long-term trading. Power deviation against the contract quantity will not be measured. Although some other provinces are doing the same, Anhui is one of the few that have clarified this point.

The Anhui power exchange has not disclosed the average green electricity price of the September 7 transaction. According to the power exchange, 32 wind and solar companies registered to participate in the direct trading with power buyers in August. It is expected more renewable power sellers will continue to register in September.

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