Global Energy Transitions
Malawi is a landlocked country in Southeastern Africa; it is a “least developed” country by United Nations (U.N.) classification and faces a range of economic and social challenges. These challenges are exacerbated by the country’s poor access to energy. Currently only 11% of the population has access to electricity. With…
China is in the process of implementing competitive power markets as a part of their sweeping economic reforms aimed at improving the economic efficiency of foundational industries. These reforms are poised to open up the world’s largest electricity market to increased participation for new generators, retailers, market intermediaries, and technology providers. These markets are also poised to reduce costs and emissions by 4-12% in different regions by prioritizing the most efficient units and increasing renewable energy integration.
The ability to capture the full potential of these savings is dependent on the design of power markets, which are balancing four primary challenges:
- Optimizing dispatch to minimize operating costs
- Placing competitive pressure on generators to improve their cost efficiency and flexibility
- Maintaining economic stability for key firms during the transition
- Facilitating the entrance of new market participants
RMI’s work in China has been focused on supporting market designers finding the right way to balance political imperatives while not sacrificing market and operational efficiency. Through this work we’ve gathered a deep understanding of the details of China’s evolving market designs, the rationale behind adopting these models, and areas for potential improvement.
This report, “Tracking China’s Provincial Spot Market Designs: 2019” is meant to externalize this information, especially for an audience working to support China in the important task of developing, piloting, and monitoring these markets. The information contained therein is relatively detailed, knowing the devil is in the details for effective market design. We know this information is necessary to direct international experts to the critical intervention points to enhance market designs that will support high renewable futures and increased power system flexibility. We also hope this information will be useful to the different commercial actors looking to participate in China’s emerging markets. RMI is committed to supporting a vibrant business ecosystem as a means to facilitate a transition to clean energy, and making this market information available to the public is a critical part of that strategy.