On May 30, the Shandong Provincial Development and Reform Commission, together with the Shandong Provincial Energy Bureau and the National Energy Administration’s Shandong Regulatory Office, jointly issued a notice titled “Notice on Ensuring a Smooth Transition for the 2025 Electricity Market.” This notice aims to facilitate the orderly advancement of the comprehensive market-oriented reform of renewable energy grid connection prices in the province, ensuring a stable transition in the electricity market and the sustained healthy development of the renewable energy sector. The notice outlines the requirements for the transitional period of market-oriented reform for renewable energy grid connection prices, which will last from June 1, 2025, until all renewable energy in Shandong Province is fully integrated into the market.
The document specifies that renewable energy projects that achieve full grid connection before May 31 will be categorized as existing projects, while those that connect on June 1 or later will be considered incremental projects. The scale of full grid connection for renewable energy projects will be based on the approved (or filed) capacity of the projects. The timing of full grid connection will be determined by the initial grid connection date of the projects. For wind power, centralized photovoltaic systems, and distributed photovoltaic projects with a capacity of 10 kV and above, the full grid connection date will be marked as the “start-up time” indicated on the trial operation ticket issued by the grid enterprises. For low-voltage distributed photovoltaic projects (below 10 kV), the grid connection time will be based on the on-site acceptance and debugging time by the grid enterprises. All renewable energy projects must be fully constructed before their first grid connection.
For projects that connect to the grid in phases, the approved (or filed) documents should clearly specify the phased construction scale and content, or separate approval (or filing) documents should be obtained. Projects that are constructed and put into operation in line with the approved (or filed) documents will be regarded as fully constructed and operational for that phase. For phased construction projects, the State Grid Shandong Electric Power Company will organize the grid connection acceptance according to procedures.
The transitional period will see renewable energy projects categorized into centralized and distributed projects participating in market transactions. For centralized projects: Existing projects (including those with energy storage) will participate in the market and settlement methods according to existing electricity market rules. Renewable energy projects whose grid connection prices or supplementary subsidies expire will participate in medium- and long-term trading (including green electricity trading) as stipulated, and will bid for the entire quantity in the spot market.
Incremental projects (including those with energy storage) will participate in medium- and long-term trading (including green electricity trading) in accordance with regulations prior to the implementation of the mechanism price and will bid for the entire quantity in the spot market according to existing electricity market rules. After the mechanism price for incremental projects (including energy storage) is implemented, the mechanism energy portion will initially be treated as grid-connected energy not participating in market trading (with the non-market percentage for mechanism energy set at the ratio of the mechanism energy obtained; if none is obtained, it will be set at 0). This portion will match the guaranteed energy for households, agriculture, etc., and will execute the mechanism price. The portion of energy above the mechanism energy will participate in medium- and long-term trading (including green electricity trading), with the monthly net contract quantity cap calculated based on the formula (1 – ratio of mechanism energy obtained) and will bid for the entire quantity in the spot market. The total quantity for incremental projects will be settled according to existing electricity market rules and bear related market operation costs.
For distributed projects: During the transition period, except for projects where the renewable energy grid connection price or supplementary subsidies expire, existing projects will participate in market transactions and settlement methods according to existing electricity market rules and related policy documents. New incremental projects and existing projects that have reached the end of their renewable energy grid connection price or supplementary subsidy lifespan must participate in market transactions for the entire quantity. Incremental projects and existing projects that have reached the end of their renewable energy grid connection price or supplementary subsidy lifespans can submit bids independently or through aggregation to participate in the market, and also have the option to participate as price takers.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/shandong-province-issues-notice-for-smooth-transition-of-power-market-by-2025/
