The government has expanded the scope of the certificates that prove power has been renewably sourced in China.
All renewable power is now eligible – including all types of wind and solar power, newly built hydro, biomass, geothermal, ocean power – according to a government notice published last week.
“Green electricity certificates are mainly demanded by export-oriented enterprises, large central enterprises, state-owned enterprises, and multinational enterprises that have requirements for green power consumption,” Economy Daily explained.
Issued by the National Energy Administration, one green certificate corresponds to 1,000 kilowatt-hours (kWh) of renewable energy. The current price of the certificate can deliver 0.03~0.05 yuan (US$0.0042–0.0069) per kWh to renewable energy providers, based on data from the China Green Electricity Certificate Subscription Trading Platform.
The green certificate system was established in 2017 with the aim of “promoting green consumption” and moving away from direct government subsidising of renewable power providers. The initial development did not go smoothly. Only onshore wind power and solar energy projects could obtain green certificates. China issued a total of more than 27 million green certificates up to January 2021, but less than 42,000 (0.15%) had actually been traded, according to research by JunHe, a law firm.
In 2022, the number of green certificates issued reached 20.6 million, corresponding to 20.6 billion kWh, but this only accounted for 0.8% of the renewable energy power generated in China that year. Sun Mingchun, chief economist of Haitong International Securities Groups, believes the green certificate market has room to grow dozens of times over.
The National Energy Administration told the media that the new broadened policy will expand “green power supply” and enhance “green power consumption”.
Many experts point out that the certification and information disclosure mechanisms need improvement. They expect more coordinating details to be issued between the green certificate system and other systems, such as the national carbon market.
Read China Dialogue‘s previous analysis on China’s green energy certificates.