Notice on the Implementation Plan of Deepening the Market-oriented Reform of New Energy Grid Tariff and Promoting the High-quality Development of New Energy in Hubei Province

The Development and Reform Commission (Energy Bureau) of cities, prefectures, directly administered cities and Shennongjia Forest District, the State Grid Hubei Electric Power Co., Ltd. and the Hubei Electric Power Trading Center Co., Ltd. All new energy power generation operators:

In accordance with the requirements of the Notice of the National Development and Reform Commission and the National Energy Administration 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), in order to do a solid job in the implementation of the market-oriented reform of new energy on-grid tariff in our province, The Provincial Development and Reform Commission and the Provincial Energy Bureau have studied and formulated the Implementation Plan for Deepening the Market-oriented Reform of New Energy Grid Tariff and Promoting the High-quality Development of New Energy in Hubei Province, which is now issued. Power grid enterprises and power trading institutions are requested to seriously organize and implement them. Municipal and state development and reform commissions (energy bureaus) should actively cooperate with policy publicity and interpretation, respond to the concerns of all parties in a timely manner, and report important matters to provincial development and reform commissions and provincial energy bureaus in a timely manner. Hubei Energy Bureau

of Hubei

Development and Reform Commission August 19, 2025 According to the decision of the Third Plenary Session of the 20th Central Committee of the Communist Party of China on promoting the price reform in the field of energy, the implementation plan

of deepening the market-oriented reform

of the electricity price of new energy

in Hubei Province to promote the high-quality development of new energy is based on the decision of the Third Plenary Session of the 20th Central Committee of the Communist Party of China. In accordance with the requirements of the Notice of the National Energy Administration of the National Development and Reform Commission on Deepening the Market-oriented Reform of New Energy On-grid Electricity Price and Promoting the High-quality Development of New Energy (FGJG [2025] No.136), the following implementation plan is formulated in order to grasp the market-oriented reform of new energy on-grid electricity price in our province and promote the high-quality development of new energy.

1. Promoting the formation

of new energy on-grid electricity prices from the market in an all-round way (1) New energy on-grid electricity is fully involved in market transactions. In principle, the on-grid electricity of all wind power and solar power projects in the province will enter the electricity market, and the on-grid electricity price will be formed through market transactions. In principle, centralized new energy is quoted to participate in market transactions, and qualified distributed new energy can participate in medium and long-term and spot markets synchronously after monomer or polymerization. The new energy participating in the market without quotation shall accept the monthly time-point real-time weighted average price of similar projects in the spot market. Before December 31, 2025, the distributed new energy shall accept the monthly full-time real-time weighted average price of similar projects in the spot market. Participate in the trans-provincial and trans-regional trading of new energy electricity, and implement the relevant policies of trans-provincial and trans-regional power transmission through the on-grid electricity price and trading mechanism.

(Two) optimize the spot market trading and price mechanism. All new energy on-grid electricity is involved in the real-time market. Taking into account the power supply and demand situation and market operation, and in accordance with the principle of gradual relaxation, the upper and lower limits of the declared price in the spot market shall be adjusted in a timely manner. The lower limit of the declared price shall be determined in consideration of other income that new energy can obtain outside the power market, and the upper limit of the declared price shall be determined in consideration of factors such as the peak price level of industrial and commercial users.

(Three) improve the medium and long term market trading and pricing mechanism. Continuously improve the medium and long-term market trading rules, shorten the trading cycle, increase the frequency of transactions, initially set the proportion of new energy medium and long-term contract requirements, and later timely relax. Considering the change of the proportion of new energy contracts, the requirements for the proportion of medium and long-term contracts of users should be adjusted accordingly. Explore the formation of medium and long-term market peak and valley time-sharing signals through spot market price guidance. New energy power generation enterprises are encouraged to sign multi-year power purchase agreements with users.

(4) Standardizing the trading and pricing mechanism of green electricity and green certificates. Green power transactions in the province do not separately organize centralized bidding and rolling matching transactions. The declaration and transaction price of green power transaction shall specify the price of electric energy and the price of corresponding green power certificate respectively.

2. Establish and improve the institutional mechanism

to support the high-quality development of new energy (5) Establish the price settlement mechanism for the sustainable development of new energy. After new energy participates in electricity market transactions, a differential settlement mechanism will be established outside the market. Distinguish the stock and incremental projects, and define the mechanism electricity quantity, mechanism electricity price and implementation period respectively. The new energy projects put into operation before June 1, 2025 (excluding) are stock projects, and the others are incremental projects. The production capacity of centralized new energy shall be subject to the project approval/filing capacity, and the production time shall be subject to the latest production time of the approved/filed generating units in the power business license; The capacity and time of distributed new energy put into operation shall be marketed by power grid enterprises. 2. During the implementation period, the State Grid Hubei Electric Power Co., Ltd. shall settle the price difference of the mechanism electricity on a monthly basis (the price difference refers to the part of the average market transaction price lower or higher than mechanism electricity price). During the continuous operation of the spot market, the average market transaction price used for price difference settlement shall be determined according to the weighted average price of the monthly similar projects in the spot real-time market. The price difference settlement fee is included in the system operation fee, which is shared or shared by all industrial and commercial users.

(6) Do a good job in implementing the stock project mechanism. Stock projects are determined by the State Grid Hubei Electric Power Co., Ltd. in accordance with the rules, reported to the Provincial Development and Reform Commission for the record, and regularly published on the new energy cloud platform of the State Grid and the online State Grid. Machine-made electricity quantity: centralized new energy, the upper limit of the proportion of machine-made electricity quantity to the on-grid electricity quantity of the project in the province is 12. Distributed new energy, the upper limit of the proportion of machine-made electricity quantity to the on-grid electricity quantity of the project in the province is 80%.

(7) Implementing the bidding mechanism for incremental projects. For incremental projects put into operation on June 1, 2025, the total scale of incremental new energy projects in the whole province is dynamically adjusted according to the completion of the responsibility weight of non-water renewable energy consumption issued by the state and the affordability of users. Whether a single incremental project enters the execution scope of the mechanism is determined by bidding. The bidding work is led by the Provincial Development and Reform Commission, organized by the Provincial Energy Bureau and the Central China Energy Regulatory Bureau, and implemented by the State Grid Hubei Electric Power Co., Ltd. In principle, it is organized before the end of each year. In the initial stage, it is divided into two types of bidding: wind power and photovoltaic. The bidding upper limit is determined by comprehensively considering the reasonable cost and benefit, green value, power market supply and demand situation, user price affordability and other factors; the bidding lower limit is set by considering the cost factor and avoiding disorderly competition.

(8) Strengthen the bidding management of incremental projects. Every year, new energy projects that have been put into operation and will be put into operation in the next 12 months and have not been included in the implementation scope of the mechanism will be organized to voluntarily participate in the bidding (subject to the provisions of the bidding announcement). Centralized projects and distributed projects of 10 kV and above shall have automatic generation control (AGC) function, and distributed projects of 10 kV and below shall meet the technical requirements of "observable, measurable, adjustable and controllable". Distributed projects that have been put into production are encouraged to participate in bidding in the form of aggregation, and the time interval between the projects that have been put into production is not more than one year. The bidding project shall submit the performance guarantee in accordance with the relevant provisions, and the mechanism electricity quantity declared by the bidding shall be appropriately lower than its total power generation. The declared mechanism price shall not exceed the upper and lower limits of the bidding price. When bidding, the prices are sorted from low to high. When the cumulative scale of the declared mechanism electricity quantity is equal to the total scale of the current bidding mechanism electricity quantity, all the projects participating in the cumulative balance are selected. If there are multiple projects with the same price at the balance point, the selected mechanism electricity quantity is determined according to the principle of the same proportion, and the mechanism electricity price of the batch is determined according to the highest quotation in the selected projects. Projects that participate in the bidding but are not selected can participate in the next bidding, and the scale of electricity that can be declared for bidding will gradually decrease.

(9) Define the implementation period of incremental projects. The implementation period of the selected incremental project mechanism tariff is tentatively scheduled for 2012. After the distributed project is put into operation, if the self-use rate of two consecutive natural years is higher than average self-use rate of the province by more than 10 percentage points, the implementation period can be increased by one year, and the implementation period can be increased by no more than two years. For projects that have been put into production at the time of selection, in principle, the time of selection shall be taken as the starting time of execution. For projects that are not put into production at the time of selection, the declared production time of the project shall be taken as the starting time for execution; if the actual production time is later than declared production time, the machine-made electricity quantity before the actual production shall not be supplemented; if the actual production time is more than 6 months later than declared production time, the results of the current selection shall be invalid, and the bidding qualification of all incremental projects within three years of the project investor shall be cancelled.

3. Improve the relevant supporting policy system

(11) Strengthen the connection with the electricity market trading mechanism. After the implementation of the price settlement mechanism for sustainable development of new energy, medium and long-term transactions and spot transactions will continue to be carried out in accordance with the corresponding market rules. The electricity included in the mechanism will no longer carry out other forms of price difference settlement. Under the condition of fully considering the proportion of mechanism electricity, supply and demand of electricity market and other factors, we should scientifically organize and carry out medium and long-term transactions of new energy.

(Twelve) improve the market price mechanism of ancillary services. Scientifically determine the market demand for ancillary services, rationally set up the varieties of paid ancillary services, and clarify the market rules such as the pricing of ancillary services. During the continuous operation of the electricity spot market, the cost of frequency modulation and reserve ancillary services that meet the requirements (excluding the cost of electricity generated in the process of providing ancillary services) is temporarily included in the system operation fee by 60% and shared by industrial and commercial users, and the remaining part is shared by the on-grid electricity that does not participate in the transaction of the electricity market.

(Thirteen) improve the relevant supporting mechanisms. Optimize the purchasing mechanism of agent purchasing electricity. Timely adjust the coal-fired power capacity price standard, and study and improve the generation side capacity compensation mechanism. When new energy participates in the inter-provincial spot, intra-provincial spot or ancillary service market, it is not included in the statistics and assessment of the utilization rate of new energy because of its high quotation, non-declaration or insufficient declaration, and the uncalled reserve market. The amount of electricity settled by the price difference of the new energy sustainable development price settlement mechanism will not be repeated to obtain the green certificate income. The price terms of the original power purchase and sale contract for new energy projects shall be implemented in accordance with this policy.

4. Safeguard measures

The Provincial Development and Reform Commission strengthens policy publicity and interpretation, responds to social concerns in a timely manner, closely tracks market price fluctuations, changes in the cost and income of new energy power generation, and the level of electricity prices for end-users, continuously optimizes policies, and continuously strengthens the guiding role of market price signals in the development of new energy. The Provincial Energy Bureau has improved the spot market, medium and long-term trading rules and green power trading policies, and has done a good job of linking up with the requirements of national policies. State Grid Hubei Electric Power Co., Ltd. has accelerated the improvement of State Grid New Energy Cloud, Online State Grid and other platforms, further standardized the disclosure of electricity market information, completed contract signing, bidding implementation, electricity fee settlement and other work, and separately collected the implementation results of the sustainable development price settlement mechanism.

This scheme will be implemented from October 1, 2025. If the current policy is inconsistent with this scheme, this scheme shall prevail. If the market situation changes significantly, it shall be adjusted in accordance with the relevant provisions of the state and the province.

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