China’s goal to become carbon neutral hinges on a unified power market, energy expert says

China’s rapidly expanding renewable energy production and electricity market liberalisation will open up opportunities for investors, developers and end users, according to an energy expert.

“What we will continue to see in the Chinese electricity market is continued opening up and liberalisation of the way in which electricity is being bought and sold,” Christian Romig, associate director at Boston Consulting Group (BCG), said at the China Conference organised by the South China Morning Post on Thursday.

“This process is accelerating as we see more intermittent, non-dispatchable renewable electricity being generated and put onto the system,” he said. “That in itself requires a more flexible and granular pricing approach to manage effectively.”

Some 400 top Chinese government officials will gather from July 15-18 for the third plenum, one of the country’s biggest annual policy meetings, to set the economic and technology development agenda for the next decade. Expectations are high that power sector reform will be one of the major topics of discussion during the four-day event.

One key aspect to watch is the roll-out of a unified national power market system, which China’s central economic planner announced last year. The National Development and Reform Commission aims to establish a preliminary structure by 2025 and complete it by 2030.

A unified power market is crucial to China achieving its goal of becoming carbon neutral by 2060, by which time the country expects to generate at least 80 per cent of its total energy from non-fossil fuel sources, according to Romig.

Last year, China, the world’s largest greenhouse gas emitter and renewable energy developer, added a record 301 gigawatts of solar, wind and hydro power generating capacity, accounting for almost 60 per cent of the global total.