Policy update on the double high project and green power trading pilot program in Jiangsu Go back »

2021-09-15 | Nanjing

"Double high" projects 

The National Reform and Development Commission (NRDC) recently announced that the review result of the energy consumption intensity of the first half year of 2021, and Jiangsu was listed on the alert list due to the poor performance. As NRDC indicated, “For the nine provinces (districts) where the energy consumption intensity does not decrease but increases, the energy-saving review of "double high" projects (高耗能、高排放High energy consumption and high emission) other than major projects planned by the state will be suspended for the rest of 2021, and the local governments will be urged to take effective measures to ensure the completion of the goal.” 

Following the announcement, Shandong released “double high" project catalogue and management guideline and specified the scope of “double high” industry and project, Anhui is also drafting the catalogue of “double high” industries and programs and management guideline in Anhui. The Catalogue and guideline will be published after further correction and completion. To our best knowledge, Jiangsu is also drafting the catalogue and management guideline. 

Management Measures on energy consumption and energy consumption intensity in Jiangsu 

Following the announcement of the alert list, controlling the energy consumption becomes the priority of Jiangsu government. Jiangsu RDC, Jiangsu Department Industry and Information Technology and other authorities released the relevant notice on containing the development of "two highs" projects, as well as started supervising and monitoring action.

Based on feedback from members, the impact is province wide with even stricter measures enforced in Wuxi, Xuzhou, Nantong, Lianyungang, Huai’an, Yancheng, Zhenjiang, Taizhou, Suqian as they are on the alert list of Jiangsu. To control the energy consumption and meet the goal of 2021, plants are required by local development zone to shut down or reduce production until end of this month or further notice – for example, around 130 factories in Taixing received such notice earlier; in Nanjing chemical park, companies received notice to reduce production by 30%. And it seems that not only the traditional “double high” projects are being targeted, but also the other industries. 

As shared by contact of Nanjing relevant authority, In Nanjing, the target is 30% down in September comparing with 2020 while in Oct-Dec, the target is to maintain equal with the absolute number in Sept 2021. 

Green power trading pilot program 

Recently, the National Development and Reform Commission and the State Energy Administration officially replied to the request of State Grid and China Southern Power Grid to promote the trade of green power, which marks the official launch of the pilot project of green electricity trading in China. NDRC released the relveant Q&A on their website, to emphasis the importance of green power trading and announce they will guide the enterprise with demand of green power to actively participate in the pilot project. In Jiangsu, On September 7, the first green power direct purchase of Jiangsu province was completed in Jiangsu Power Exchange Center. As one of the first pilot enterprises in Jiangsu, our member, BASF-YPC signed the first green power trading agreement and pioneered in the use of renewable power for sustainable operation. 

Under China’s dual carbon goal and the carbon strategy in Europe, it has become critical that to include green power plan to the corporate strategy and the European Chamber Nanjing Chapter is fully aware of the demand of the green power among our members and will engage with the local authorities for a level-playing field in terms of the access to the green energy. 

Q&A on the on the green power trading pilot project 

Q: what’s the background of the green power trading?

A: In order to implement the dual carbon strategy and accelerate the construction of new power system, we must take strong measures to vigorously develop new energy. Due to the technical characteristics of unstable output of new energy power, the consumption and operation cost of power system will increase significantly. In order to realize the multiple goals of low-carbon transformation, safety, reliability and economic affordability of electric power at the same time, we must deepen the reform of electric power system and make exploration and innovation in system mechanism and market construction. 

By carrying out green power trading, some users who are willing to bear more social responsibilities will have the opportunity to directly traded with wind power and photovoltaic power generation projects, so as to guide green power consumption in a market-oriented way, reflect the environmental value of green power, and the generated green power income will be used to support the development and consumption of green power and better promote the construction of new power system. 

Q: Is there any difference between green power and general power trading? What is the trading mechanism? Which market players can participate? 

A: We will actively guide users with green power demand to trade directly with power generation enterprises, and give priority to organization, arrangement, implementation and settlement of green power in power market trading and power grid dispatching operation, Through relevant policies and measures, encourage the enthusiasm of power users to purchase green power. The market players involved in green power trading mainly focus on wind power and photovoltaic power generation. In the near future, it will gradually expand to hydropower and other renewable energy. 

Priority will be given to fully market-oriented green power. If the scale of fully market-oriented green power is limited, It can be considered to purchase green power with government subsidies. 

Q: what’s the plan for next step?

A: Under the guidance of the national development and Reform Commission and the national energy administration, the pilot work of green power trading will be organized by the State Grid and China Southern Power Grid, and will be rolled out in Beijing power trading center and Guangzhou Power Trading Center, to prepare the implementation rules of green power trading, further improve the functions of the technology platform, and organize the registration of market subjects and green power trading. 

At the initial stage of the pilot, it is planned to select areas with strong willingness to consume green power. After the pilot work of green power trading is started, other willing areas will also give active support in the follow-up. During the pilot process, relevant departments will strengthen guidance, improve relevant supporting policies, coordinate and solve relevant problems in time, and create a good environment for green power trading.