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2025
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09
Leverage the role of electricity prices as a signal to support the deepening and solid implementation of carbon peaking and carbon neutrality efforts.
Since 2020, China's energy and power sector has served as the primary battleground for achieving the dual carbon goals, with green development accelerating steadily. Market pricing, as the core indicator of resource value and the guiding principle for resource allocation, has effectively stimulated the vitality of green transformation. Currently, as the “dual carbon” efforts advance, new challenges have emerged. It is imperative to accelerate the refinement of electricity pricing mechanisms that align with the demands of the transition. This will better leverage the guiding role of prices, promote the transformation of economic development models, and inject sustained, powerful momentum into achieving the “dual carbon” goals. （Source: Yitanjia）(Image sourced from the Internet)
Since 2020, China's energy and power sector has served as the primary battleground for achieving the dual carbon goals, with green development accelerating steadily. Market pricing, as the core indicator of resource value and the guiding principle for resource allocation, has effectively stimulated the vitality of green transformation. Currently, as the “dual carbon” efforts advance, new challenges have emerged. It is imperative to accelerate the refinement of electricity pricing mechanisms that align with the demands of the transition. This will better leverage the guiding role of prices, promote the transformation of economic development models, and inject sustained, powerful momentum into achieving the “dual carbon” goals.
Market prices are continuously adapting to the requirements of the dual carbon goals.
Over the past five years, electricity price reforms have accelerated and intensified, continuously refining pricing mechanisms across all segments of the power system—generation, transmission, distribution, and consumption.
In the generation segment, grid-connected electricity prices for coal-fired power plants have been fully liberalized. An innovative “capacity + electricity volume” pricing mechanism for coal-fired power has been established, facilitating the transition of coal-fired power toward becoming a regulating and supporting power source while driving the optimization and upgrading of related industrial structures.
In the transmission and distribution segment, the third regulatory cycle of grid transmission and distribution pricing reform has further optimized the electricity price structure, incentivizing users to efficiently utilize power resources. An innovative pricing mechanism for local consumption of new energy has been established, with clear and transparent transmission and distribution prices for new market entities and supply models. This has cleared obstacles for further promoting the efficient development and utilization of new energy resources and the reasonable recovery of grid costs.
From the electricity consumption perspective, a market-based pricing mechanism has been established for industrial and commercial users through price pass-through. The time-of-use pricing mechanism continues to be refined, with the leverage effect of electricity prices increasingly utilized to better guide users in proactive adjustments. This supports improvements in power supply and demand, promotes the consumption of new energy, and achieves energy conservation, efficiency gains, and reduced carbon emissions.
Refine the electricity pricing system to support the achievement of the dual carbon goals.
In the current and foreseeable future, to achieve carbon peaking and carbon neutrality goals, the pace of green transformation in the energy and power sectors is accelerating, placing higher demands on deepening electricity price reforms.
Generation Sector—Optimize bidding restrictions by reasonably setting upper and lower limits that fully consider advanced renewable energy technology costs and prevent disorderly competition. Avoid eliminating price floors, and explore clearing pricing mechanisms that incentivize entities to report true marginal costs, thereby promoting rational price formation and effective signal transmission.
Grid Sector—Accelerate the implementation of cross-provincial and cross-regional pricing mechanisms based on dual-rate or single-capacity systems to support coordinated regional green transformation.
Electricity Consumption Sector—Develop tiered electricity pricing policies for key industries benchmarked against advanced energy and carbon consumption standards. Systematically optimize tiered pricing implementation criteria to leverage electricity prices as an incentive for market entities to proactively transform, enhance energy efficiency, and reduce carbon emissions.
Supporting Policies—Strengthen the implementation of renewable energy consumption responsibilities. Explore application scenarios for green electricity and green certificates in supply chain procurement management and green consumption incentive measures to ensure the proper release of green value. Enhance the economic value and profitability of green resources while strengthening the sustainable development capacity of low-carbon industries. Simultaneously advance carbon market development, leveraging price transmission mechanisms to promote coordinated energy conservation and carbon reduction.
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