Interview with Luo Qi, Vice Chairman of China New Energy Overseas Development Alliance: The construction of the green electricity market needs to be carefully crafted

China's new energy development and green power market construction still has a long way to go, extensive development may lead to a waste of investment, so the construction of the green power market needs to be carefully crafted, and further improve the relevant policies and mechanisms. Without strengthening policy support and supervision, and improving the flexibility of dispatching and market openness, it is difficult to stimulate all kinds of entities to participate in the construction of a new power system.

China's green electricity trading has been two years old. In the past two years, local policies and projects related to green electricity trading have increased day by day, and the scale of transactions has also shown a rapid growth trend. What is the current situation of green electricity trading in China? What are the challenges faced by enterprises in the process of green electricity trading? What links need to be improved in the rapid development of green electricity trading? Focusing on the above issues, the reporter of "China Energy News" recently interviewed Luo Qi, vice chairman of China New Energy Overseas Development Alliance.

Policies stimulate the development of green power trading

China Energy News: What is the current status of China's green electricity trading?

Luo Qi:Since 2021, when the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) released a pilot trading plan for green electricity, five or six policies have been issued at the national level. Recently, the relevant authorities have jointly launched a series of strong policies to encourage the development of renewable energy, and the green certificate is one of them.

As of 2021, more than 40 billion kWh of green electricity has been traded in China, and more than 34 million green certificates have been traded. Zero-carbon parks, zero-carbon factories, and local policies and projects to promote green power trading have sprung up.

At present, China is speeding up the construction of a new power system, and the green electricity market is developing rapidly. By 2030, the energy consumption of GDP should be reduced by more than 20% compared with 2005, which has become a strategic goal that must be achieved.

Nowadays, new energy projects are in full swing across the country, the proportion of microgrid construction is increased, the proportion of distributed energy access is increased, and the supply of green energy and green power is increasing. However, at present, there are still some problems in China's green power market: the instability of new energy power generation brings certain pressure and risks to the power system; The development cost of new energy power generation is high, the cost of power generation system is subject to the slow decline of energy storage, the market mechanism of green power trading needs to be improved, and the power market needs to strengthen supervision and regulation.

China Energy News: What experience can be learned from foreign green power trading?

Luo Qi:On the whole, the construction of foreign green power markets is relatively mature, and a systematic and complete policy system has been established. For example, the United States has established a renewable energy quota system to support the mandatory market, and the European Union has adopted a directive requiring all EU member states to establish national green electricity certificates, and has established a joint standard for the "European Energy Certification System".

Europe and the United States have also built a relatively complete green electricity market mechanism, in which market players can consume green electricity in a variety of flexible ways in either the compulsory market or the voluntary market. In addition, foreign countries have also established a mature green power certificate (hereinafter referred to as "green certificate") life cycle management mechanism, and the whole process of green certificate issuance, transfer and cancellation can be traced.

There is a price mismatch in green electricity trading

China Energy News: You mentioned that there are still problems in green power trading, please talk about it in detail?

Luo Qi:At present, there are the following problems in green power trading: First, the price formation mechanism of green power needs to be clarified. If the added value of green electricity cannot be directly reflected in the power purchase cost of electricity enterprises, the increase in electricity prices will inhibit the willingness to purchase green electricity, which is also the main factor for the current inactivity of green power trading.

Secondly, the problem of inter-provincial and inter-regional power trading is sensitive, and there is a mismatch between the supply and demand of green power in Northwest China, mainly because China's green energy is "rich in the west and poor in the east", and the consumption is "more in the east and less in the west", and the complexity of power trading flexibility and electricity fee transparency is difficult to solve. In particular, there is a mismatch in the price of green power in China, the parity feed-in tariff of new energy in Northwest China is low, and the on-site electricity price of green power transmission is generally lower than the benchmark electricity price of local thermal power, which cannot reflect the ecological value of green power.

Thirdly, the development of new energy projects with "flood irrigation" is highly competitive, and the utilization of old power stations is intertwined with the consumption of new power stations, making it difficult for new energy to achieve high-quality development. At present, how many new energy projects have quality problems, how many projects have operation and maintenance problems, and how many projects have "unintelligible" problems need to be pondered and discussed.

Finally, at present, green electricity trading and carbon emissions have not been effectively linked, and the roles of the two are not clear enough. The two policy designs belong to different competent departments, and the policy margin is not obvious enough, and there is a lack of policy guidance. It is very important to establish a market mechanism for carbon-electricity integration and give full play to the decisive role of the market in resource allocation.

It is recommended to strengthen policy support and supervision

China Energy News: What suggestions do you have to solve the above problems?

Luo Qi:The first is to improve the rules and incentive mechanisms for electricity trading, and highlight the attributes and value of green electricity. There are many uncertainties and risks in the trading market of green electricity, different power trading rules in different provinces, and serious policy changes and local market manipulation. Therefore, it is very important to establish sound trading rules and incentive mechanisms to reduce the cost of electricity consumers and enhance the added value of green power supply enterprises. 

The second is to complete the integration and unification of green certificates and green electricity, and highlight the price attributes of green electricity. China's green certificates and green electricity should complete the deep integration of issuance, issuance and trading, so that users can simply understand the electricity price component of green electricity. At present, users should not only learn the relevant policies of green electricity, but also understand the local power trading rules, and complete the business docking with the electricity sales company, which is a very complex process. 

The third is to strengthen policy support and supervision to solve the fairness of transactions. The electricity trading market needs to highlight the support for green electricity, and the design and supervision of electricity trading rules need to be highlighted. It is suggested that local governments should increase their support for green electricity, and the competent authorities should increase their support for electricity price policies. The progress of the construction of the electricity market varies from place to place, and using local characteristics as a "cover" for not carrying out electricity market-oriented reform is not conducive to local economic development. 

There is still a long way to go in the development of new energy and the construction of green power market in China, extensive development may lead to a lot of investment waste, the construction of the power market needs to be carefully crafted, and relevant policies and mechanisms need to be further improved. Without strengthening policy support and supervision, and not improving the flexibility of dispatching and the openness of the market, it is difficult to stimulate all kinds of entities to participate in the construction of a new power system, and it is also difficult to ensure the healthy development of the construction of a green power market.