The National Development and Reform Commission issued another notice, related to electricity

　　The National Development and Reform Commission's decision to fully liberalize the

　　Notice of electricity consumption plan issued by power users

　　To the Development and Reform Commission, Economic and Information Technology Commission (Industry and Information Technology Commission, Department of Industry and Information Technology, Department of Economic and Information Technology, Bureau of Industry and Information Technology), Energy Bureau of each province, autonomous region, and municipality directly under the central government, Beijing Municipal Urban Management Committee, China National Nuclear Corporation, State Grid Corporation of China, China Southern Power Grid Co., Ltd., China Huaneng Group Co., Ltd., China Datang Corporation, China Huadian Corporation, State Power Investment Corporation, China Three Gorges Corporation, State Energy Investment Corporation, China Development Bank Corporation, China Resources Group Co., Ltd., and China General Nuclear Power Group Co., Ltd.:

　　In order to thoroughly study and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the 19th National Congress of the Communist Party of China, conscientiously implement the deployment requirements of the Central Economic Work Conference and the Government Work Report, further fully liberalize the power generation and consumption plans of commercial power users, improve the marketization of power trading, and deepen power system reform, the following notice is hereby issued on the relevant requirements for fully liberalizing the power generation and consumption plans of commercial power users.

　　1. Fully liberalize the power generation and consumption plans of commercial power users

　　(1) All localities should coordinate and promote the comprehensive liberalization of power generation and consumption plans for commercial power users, adhere to the principles of standardization, order and prudence, adhere to the market-oriented direction to improve the price formation mechanism, implement the requirements for clean energy consumption, ensure the safe and stable operation of the power grid and the stable supply of power users, and strengthen the on-site and post-event supervision of market entity access, transaction contracts and transaction prices.

　　(II) In principle, all power generation and consumption plans of commercial power users are liberalized. Except for power users in industries such as residential, agricultural, important public utilities and public welfare services, as well as factory power and line losses necessary for power production and supply, all other power users are commercial power users.

　　(III) Among the commercial power users, those that do not comply with the national industrial policy will not participate in market-based transactions for the time being, and those whose products and processes fall into the elimination and restriction categories in the "Guidelines for Industrial Structure Adjustment" will strictly implement the existing differentiated electricity price policy. Enterprise users that comply with the tiered electricity price policy will continue to implement the tiered electricity price policy on the basis of the market-based electricity price.

　　(IV) Enterprises with coal-fired self-contained power plants shall bear government funds and surcharges, policy cross subsidies, universal services and social responsibilities in accordance with relevant national regulations, pay system standby fees to power grid enterprises as agreed, obtain power business licenses, meet energy efficiency and environmental protection requirements, and become qualified market entities, and orderly promote their participation in transactions in accordance with trading rules for electricity other than self-generated and self-used electricity. In order to promote and encourage the comprehensive utilization of resources, self-contained power plants with waste heat, pressure and gas of corresponding scales shall be built for recycling and utilizing the usable heat, pressure difference and waste gas generated in the process of industrial production, and relevant support policies such as reduction and exemption of system standby fees and policy cross subsidies shall continue to be implemented.

　　(V) Local government departments in charge should work with power grid companies to conduct detailed research and compile a list of users who are not participating in the market for the time being, understand the participation of commercial power users in market-based transactions, gradually establish a statistical analysis system for the participation of power users in different industries in market-based transactions, and promptly understand the full liberalization of commercial power users.

　　2. Support small and medium-sized users to participate in market-based transactions

　　(VI) Actively support small and medium-sized users to participate in market-based transactions through power sales companies. Small and medium-sized users need to sign power purchase agency contracts with power sales companies and power supply contracts with power grid companies to clarify relevant rights, responsibilities and obligations.

　　(VII) The main forms of fully liberalizing the participation of commercial power users in market-based transactions may include direct participation, participation by power sales companies, and other market-based methods that are studied and clarified by local governments based on actual conditions. Local governments should speed up the study and reasonably formulate ways for small and medium-sized users to participate in market-based transactions. Small and medium-sized users can make their own choices based on their own actual conditions, or they can give up the right to choose and maintain the existing way of purchasing electricity. Local governments can set a transition period for fully liberalizing the power generation and consumption plans of commercial power users in light of the power supply and demand situation in their regions.

　　(VIII) For small and medium-sized users who choose to participate in market-based transactions but are unable to reach a transaction intention with power generation companies, the original electricity purchase method will be implemented during the transition period, and other market-based electricity purchase methods will be implemented after the transition period.

　　(IX) For small and medium-sized users who withdraw from market-based transactions or choose not to participate in market-based transactions, the power grid companies shall bear the responsibility of guaranteeing minimum power supply before they participate in market-based transactions again directly or through agents.

　　III. Improve the price formation mechanism after fully liberalizing the commercial power generation and consumption plan

　　(10) The price formation mechanism after the commercial power generation and consumption plan is fully liberalized shall be implemented in accordance with the relevant policies of the price regulatory authorities.

　　(XI) For electricity that has been traded in accordance with market-based trading rules, prices will still be determined in accordance with market-based rules. Power users and power generation companies are encouraged to negotiate and sign contracts independently, and to determine specific prices in a flexible and floating manner, with the price floating method agreed upon in advance by both parties.

　　4. Ensure the supply of electricity for public welfare

　　(XII) All localities should further implement the relevant requirements for standardizing the management of priority power generation and priority power purchase, and arrange priority power purchase for users of agriculture, residents' lives, party and government agencies, schools, hospitals, public transportation, finance, communications, postal services, water supply, gas supply and other important public utilities, public welfare services, etc. In light of local conditions, strengthen classified measures, speed up the study of measures to ensure the implementation of priority power generation and priority power purchase, and coordinate the standardized management of the priority power generation and priority power purchase plan.

　　(13) All localities should, in accordance with the principle of priority power purchase guarantee, compile a detailed list of priority power purchase users, implement dynamic management and follow-up guarantee, and in principle, all other commercial power users outside the priority power purchase should participate in the market.

　　(XIV) All localities should reasonably formulate orderly electricity consumption plans and adjust them on an annual basis. When there is a power shortage or major emergency, power supply should be guaranteed to priority electricity users, and other users should assume the obligation of orderly electricity consumption in accordance with the orderly electricity consumption plan.

　　(15) Grid companies must assume relevant responsibilities in accordance with regulations and guarantee electricity to priority power purchasers in accordance with government pricing. Priority power purchases are first guaranteed by priority power generation.

　　5. Ensure the power generation of clean power within the plan

　　(XVI) Research and promote the implementation of the policy of guaranteeing priority power generation, focusing on the guaranteed purchase of clean energy such as nuclear power, hydropower, wind power, and solar power. The power generation of nuclear power units shall be included in the priority power generation plan, and the guarantee consumption shall be done in accordance with the relevant work requirements of the management of the priority power generation and priority power purchase plan. In areas with good consumption conditions, hydropower shall arrange priority power generation plans based on water supply conditions, taking into account resource conditions, historical averages, and comprehensive utilization requirements; in areas with limited consumption, based on the power generation in recent years, arrange priority power generation plans with guaranteed quantity and price according to market space, and the price of priority power generation outside the guaranteed quantity and price shall be determined through market-based methods. For new energy such as wind power and solar power generation, in areas where the state has not approved the minimum guaranteed purchase annual utilization hours, arrange priority power generation plans in full according to resource conditions; in areas where the state has approved the minimum guaranteed purchase annual utilization hours, reasonably arrange priority power generation plans based on the local supply and demand situation, and on the basis of the guaranteed quantity and price purchase of electricity within the minimum guaranteed purchase annual utilization hours approved by the state, encourage electricity exceeding the minimum guaranteed purchase annual utilization hours to compete for access to the grid through market-based transactions.

　　(XVII) Actively promote the work of unsubsidized grid-parity for wind power and photovoltaic power generation. For grid-parity projects and low-price grid-connected projects, all electricity should be included in the priority power generation plan to ensure that they are given priority access to the grid under the same conditions. If grid-parity projects and low-price grid-connected projects have abandoned wind and solar power, the provincial government department in charge will work with power grid companies to fully approve the abandoned wind and solar power as a transferable priority power generation plan, which can be transferred to other power generation companies through power generation rights trading across the country and obtain benefits. Power trading institutions should organize the power generation rights trading of the priority power generation plan for abandoned wind and solar power as required and promote the implementation of the transaction.

　　(XVIII) Grid companies, power users and power sales companies should assume relevant responsibilities as required and fulfill their obligations to consume clean energy. Market players participating in cross-provincial and cross-regional market-based transactions are encouraged to consume additional clean energy electricity outside the priority power generation plan.

　　(19) Encourage commercial power users to conduct market-based transactions with clean energy such as nuclear power, hydropower, wind power, and solar power generation, and absorb the additional clean energy electricity that is not planned. Power trading institutions should actively organize clean energy consumption transactions and further reduce the phenomenon of abandoned water, wind, and solar power.

　　(20) Regions with limited clean energy consumption should speed up the implementation of dividing the priority power generation plan into two parts: "guaranteed quantity and guaranteed price" and "guaranteed quantity and competitive bidding". The price of the "guaranteed quantity and competitive bidding" part shall be formed through market-based transactions, and the part of the market-based transaction that has not been completed can be implemented according to the average power purchase price formed by the market for the same type of units in the region.

　　VI. Strengthening the performance supervision of direct power trading

　　(21) All localities should formulate and improve relevant rules and regulations in a targeted manner, implement a joint incentive mechanism for compliance and a joint punishment mechanism for non-compliance, and strengthen the supervision of the performance of direct power trading. Market entities shall sign direct trading contracts in accordance with market trading rules, clarify the corresponding rights and obligations, trading volume and price and other important matters, and strictly perform the contract in accordance with the contract content.

　　(XXII) Local economic operation departments shall, together with power grid enterprises and power trading institutions, implement monthly statistics on the performance of direct power trading contracts, give full play to the role of power grid enterprises and power trading institutions, bring the performance of direct power trading contracts into unified management, and report quarterly within a certain range. The National Energy Administration dispatches agencies to supervise the performance of direct power trading contracts within its jurisdiction.

　　(XXIII) Market players such as power generation enterprises, power users, and power sales companies must firmly establish market awareness, legal awareness, contract awareness, and credit awareness. Direct transaction contracts must be strictly implemented after they are reached. If they fail to perform in accordance with the terms of the contract, they must bear the corresponding breach of contract liability and accept relevant assessment and punishment.

　　VII. Safeguard Measures

　　(XXIV) All localities should take positive measures to ensure that cross-provincial and cross-regional transactions are coordinated with the regional, provincial (regional, municipal) power markets according to actual conditions. In cross-provincial and cross-regional market-based transactions, network-to-network and network-to-point direct transactions are encouraged, and point-to-network and point-to-point direct transactions are supported in an orderly manner in areas with conditions. All localities should equally liberalize cross-provincial and cross-regional market entities for sending and receiving, and promote large-scale optimization of resource allocation and clean energy consumption. Beijing and Guangzhou Power Trading Centers and local power trading institutions should actively create conditions, improve trading rules, strengthen mechanism construction, build trading platforms, and organize cross-provincial and cross-regional market-based transactions.

　　(XXV) The China Electricity Council, third-party credit service agencies and various power trading agencies shall collect credit data on power trading, establish a dynamic credit record database, and publish relevant performance credit status in a timely manner. Enterprises that are honest and trustworthy and conscientious in fulfilling their contracts shall be included in the credit records, and enterprises that fail to fulfill their contracts or even maliciously breach their contracts shall be included in the bad credit records and publicly reported as appropriate. Joint punishment measures shall be implemented for enterprises that have committed illegal and irregular acts and are seriously dishonest and are included in the "blacklist".

　　(XXVI) The competent departments of the governments of all provinces (autonomous regions and municipalities) shall submit to the National Development and Reform Commission on a monthly basis the progress of the plan for the full liberalization of power consumption. All power trading institutions and power grid enterprises shall be responsible for the organization and implementation of market-based transactions and cooperate with relevant departments in supervision. All power trading institutions shall conduct verification of market transactions and report relevant situations to the competent departments of local governments on time. The dispatched agencies of the National Energy Administration shall supervise the implementation of the plan for the full liberalization of power consumption in all provinces (autonomous regions and municipalities) under its jurisdiction and report relevant situations to the National Development and Reform Commission and the National Energy Administration every quarter.

　　National Development and Reform Commission

　　June 22, 2019