Recently, the National Energy Administration released the “China Green Power Certificate Development Report” (hereinafter referred to as “the Report”). The Report indicates that in 2024, a total of 4.734 billion green certificates will be issued nationwide, marking a significant increase of 28.36 times compared to the previous year. Of these, 3.158 billion will be tradable green certificates. The total number of green certificate transactions in 2024 is expected to reach 446 million, a growth of 3.64 times year-on-year, with 277 million certificates traded independently and 169 million as part of green electricity transactions.
Prior documents have indicated that high-energy-consuming industries, such as steel, petrochemicals, and data centers, are required to ensure that their consumption of green electricity reaches at least the national average by 2030. For instance, a single enterprise in the electrolytic aluminum sector requires over 4 billion kilowatt-hours of green electricity annually; implementing supportive energy storage systems can help mitigate the cost risks arising from fluctuations in green electricity supply.
The Report reveals considerable variation in the sale and purchase of green certificates across different regions. The top five provinces in terms of sales are Inner Mongolia, Hebei, Gansu, Xinjiang, and Yunnan, collectively selling 222 million certificates, which accounts for approximately 49.62% of total national transactions. In contrast, the top five provinces for purchases include Zhejiang, Inner Mongolia, Guangdong, Anhui, and Shanghai, which together bought 252 million certificates, representing about 56.43% of the national total.
As of December 2024, the cumulative national transactions of green certificates have reached 553 million, showing a year-on-year increase of 4.19 times. Among these, 315 million were traded independently, and 238 million were part of green electricity transactions. Due to various factors, including policy changes and supply-demand dynamics, the trading price of green certificates exhibited a downward trend, aligning more closely with the prices of EU Guarantees of Origin (GOs) and International Renewable Energy Certificates (I-RECs).
In terms of independent trading, the monthly average price of green certificates in 2024 fluctuated between 3 and 24 yuan per certificate, with an annual average of approximately 5.59 yuan per certificate. The Report shows that the manufacturing industry accounted for the largest share of green certificate purchases, making up about 70%. The role of green certificates in supporting the green transformation of manufacturing enterprises is particularly evident. The electricity, heat, gas, and water production and supply industry accounted for about 20%, while other sectors made up approximately 10%. The information transmission, software, and IT services industries have seen rapid growth in green certificate purchases due to related policies promoting green and low-carbon development.
In 2024, approximately 59,000 entities participated in green certificate trading, representing a year-on-year increase of 2.5 times. Driven by policy initiatives, industry demand, and market mechanisms, the scale of green certificate trading in economically developed regions has expanded rapidly. The Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area were included in national strategic development plans, and local governments are promoting participation in green certificate trading through subsidies and tax incentives.
Under the dual pressures of energy-saving and carbon reduction policies, as well as the green transformation of supply chains, various high-energy-consuming industries, export-oriented companies, and large data centers have become significant players in the green certificate market. Analysts believe that the goal of achieving a high percentage of green electricity consumption will stimulate demand for stable renewable energy supplies. As a critical technology for smoothing output fluctuations and enhancing absorption capacity, the demand for energy storage will grow alongside the expansion of the green certificate market.
The Report indicates that in 2024, the total number of green certificates traded in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao area reached 240 million, accounting for over 50% of the national total. Specifically, the Yangtze River Delta purchased 155 million certificates, an increase of 6.45 times year-on-year, while the Guangdong-Hong Kong-Macao area acquired 4.478 million, up 5.74 times year-on-year.
The Energy Law mandates that public institutions should prioritize the procurement and use of renewable energy and energy-saving products and services. Energy users are obligated to fulfill their energy conservation duties by law. All parties are encouraged to actively participate in green energy consumption to foster a green, low-carbon lifestyle. The State Council has circulated policies from the National Development and Reform Commission and the National Energy Administration, which propose establishing a certification standard, system, and identification system for green electricity consumption based on green certificates, along with implementing green electricity consumption certification.
Several localities have issued documents specifying the green electricity consumption ratios for data centers and have clarified policy support for green electricity absorption. Green certificate trading platforms are being established across the country to meet the green energy needs of businesses. The “2023 China Green Electricity (Green Certificate) Consumption Top 100 Enterprises List” released in June 2024 ranks well-known companies such as State Energy Group, State Power Investment Corporation, Sinopec, and BASF among the top consumers of green electricity.
Moreover, government policies explicitly require the implementation of budget management for fossil energy consumption by major energy-consuming units. Any excess consumption must be offset by purchasing green certificates or green electricity. The integration of green certificate trading with energy consumption control policies is also being strengthened, with the corresponding electricity from green certificate transactions included in the “14th Five-Year Plan” provincial energy-saving target evaluation criteria. Some local governments, such as those in Zhejiang, Shandong, and Guangdong, are exploring policy systems centered on improving energy efficiency and implementing control systems for energy consumption intensity and totals, as well as monitoring energy consumption budgets for key energy-consuming enterprises.
It is noteworthy that green certificates are gradually being incorporated into carbon emission accounting systems and are connecting with the China Certified Emission Reduction (CCER) market. By enhancing the utilization rate of renewable energy, energy storage can help projects acquire more green certificates, thereby reducing corporate carbon footprints and improving ESG performance. The development of the green certificate market presents structural opportunities for the energy storage industry. In the short term, policies are pushing for a deep integration of energy storage and renewable energy, while in the long term, the growth in green certificate demand and the synergy with the carbon market will propel energy storage to become a vital support for new power systems.
The explosion of the green certificate market is not an isolated phenomenon, but rather a reflection of the transformation of China’s energy system from “scale expansion” to “value reconstruction.” In this transformative process, energy storage technology serves as both the physical foundation for stabilizing green electricity supply and a strategic lever for linking “environmental rights – economic value – financial instruments.”
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/chinas-green-certificate-market-unpacking-the-massive-growth-and-opportunities-for-commercial-energy-storage/
