First, what is the background of the market-oriented reform of Shandong's new energy grid price? In February
2025, the National Development and Reform Commission and the National Energy Administration issued the Notice on Deepening the Market-oriented Reform of New Energy On-grid Tariff and Promoting the High-quality Development of New Energy (FGJG [2025] No.136), which fully deployed the market-oriented reform of new energy on-grid tariff. Shandong Province, as a pioneer area of green, low-carbon and high-quality development, implements the requirements of national reform and promulgates the Implementation Plan of Market-oriented Reform of New Energy Grid Electricity Price in Shandong Province, in order to promote the full entry of new energy grid electricity into the market and the full formation of grid electricity price by the market.
2. What are the main contents of the Implementation Plan for the Market-oriented Reform of New Energy Grid Tariff in Shandong Province?
The Implementation Plan mainly includes three aspects: First, establish and improve the price mechanism to adapt to the high-quality development of new energy. We will promote the formation of all on-grid electricity prices for new energy by the market, establish a price settlement mechanism and a price competition mechanism for the sustainable development of new energy, and improve the green certificate trading mechanism for green electricity. The two is to establish and improve the market trading mechanism to adapt to the high quality development of new energy. We will improve the trading and pricing mechanisms in the medium and long-term market, spot market and ancillary services market, optimize the capacity compensation mechanism on the generation side, and standardize the cost compensation mechanism in the electricity market. The three is to establish and improve the risk provention and control mechanism to adapt to the high quality development of new energy. We will improve the information disclosure mechanism and price monitoring system of the electricity market, establish a cost investigation system for generating units, and improve the price supervision mechanism of the electricity retail market.
3. Does the market-oriented reform of Shandong's new energy grid price have an impact on the stock projects? What is the impact on incremental projects? After the new energy projects put into operation before June 1,
2025 participate in the market transaction, the price level of the mechanism is implemented according to the upper limit of the national policy, which is 0.3949 yuan per kilowatt-hour (including tax). The implementation period shall be subject to the reasonable utilization hours of the whole life cycle, the remaining hours and the 20 years of operation, whichever is earlier. For incremental new energy projects put into operation on June 1, 2025, the Shandong Development and Reform Commission, together with relevant units, shall define the scale and implementation period of mechanism electricity, and determine the level of mechanism electricity price through price competition. All localities shall not take the allocation of energy storage as a precondition for the approval of new projects, grid connection and access to the Internet.
4. What are the specific provisions on the differential settlement mechanism in the Implementation Plan?
The Implementation Plan proposes that after new energy projects participate in electricity market transactions, a differential settlement mechanism should be established synchronously outside the market. For the electricity included in the mechanism, if the average market transaction price is lower or higher than mechanism price, the power grid enterprise shall carry out the differential settlement, and the differential cost shall be included in the system operation cost, which shall be shared (or shared) by all users. New energy projects that have been incorporated into the mechanism may voluntarily apply for withdrawal within the implementation period. If the implementation of new energy projects expires or voluntarily withdraws within the time limit, they will no longer be included in the scope
of the implementation of the mechanism. 5. What are the specific provisions on the capacity compensation mechanism in the Implementation Plan?
The Implementation Plan proposes to optimize the compensation mechanism of generation side capacity. According to the total demand of power load (including reserve capacity) of Shandong power grid, the effective capacity of various types of market-oriented units is compensated. The capacity compensation standard is determined according to the principle of recovering the long-term marginal unit fixed cost of the whole network, and the capacity supply and demand coefficient is set according to the total capacity demand and the total effective capacity of the system. The capacity tariff of the generating unit is determined by the product of the effective capacity that the unit can provide, the standard of capacity compensation tariff and the capacity supply and demand coefficient of the current year.
6. What are the restrictions on the trading scope and income of the mechanism electricity in the Implementation Plan? In order to clarify the environmental value of green power and the value of electric energy and avoid the risk of repeated statistics of the same environmental value, the
Implementation Plan clarifies that the electricity covered by the mechanism price does not participate in the green power transaction and does not obtain the green certificate income repeatedly; In order to avoid the failure of market price formation mechanism in the initial stage and prevent repeated arbitrage of new energy projects, it is clear that the mechanism of electricity consumption does not participate in medium and long-term transactions, and does not participate in the declaration, clearing and settlement of the day-ahead market.
7. What are the rules for incremental new energy projects to participate in bidding? Incremental new energy projects put into operation on June 1,
2025 will determine the level of mechanism electricity price through price competition. When bidding, the new energy enterprises are fully competitive under the guidance of the lower limit of the declared adequacy ratio and the upper and lower limits of the bidding; the selected projects are determined according to the declared price from low to high, and the mechanism electricity price is determined according to the highest quotation of the selected projects in principle. New energy projects shall voluntarily participate in the bidding work, and those participating in the bidding shall issue a performance guarantee in accordance with the regulations. Supporting household distributed photovoltaic projects to participate in bidding independently or by entrusted agents. At this stage, distributed photovoltaic agents should have the qualifications of power selling companies. In principle, the bidding work in 2025 will be organized in August, and from 2026, the bidding work will be organized in October of the previous year.
8. What is the impact of the market-oriented reform of Shandong's new energy grid price on the electricity market?
User side: There is no impact on the electricity price level of residential and agricultural users; for industrial and commercial users, it is expected that the average electricity price of industrial and commercial users in the first year of the implementation of the reform will be basically the same as that of the previous year, or will decrease. Power generation side: It is conducive to promoting the high-quality development of the new energy industry, promoting the construction of a new power system, and integrating into the construction of a unified national power market.
9. How can Shandong ensure the smooth progress of the market-oriented reform of the electricity price of new energy?
Shandong Development and Reform Commission, together with Shandong Energy Regulatory Office and Shandong Energy Bureau, is responsible for formulating supporting implementation rules in accordance with the Implementation Plan, defining the time node for new energy to enter the market, and promoting the orderly development of various work. The State Grid Shandong Electric Power Company is responsible for building a bidding platform, cooperating with the incremental new energy project bidding work, and timely carrying out the mechanism electricity fee settlement work. According to their work functions, each unit strengthens communication and exchanges with various market players to form a consensus on reform.
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