State of the Market 2019: Corporate Renewable Procurement in China

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Renewable energy power purchase agreements have increasingly gained popularity among corporates in the United States and Europe, becoming a strong driver for renewable energy development. In the United States alone, 6.53 GW of corporate renewable deals were signed in 2018. Zooming in to China, increased interests have been caught in the market with more and more multinational companies and Chinese domestic companies setting up sustainability targets to green their electricity load in China, one of the largest developing economies with huge business strategic value and market growth potential.

Rocky Mountain Institute’s Business Renewables Center (BRC) China team has been monitoring and tracking the development of the corporate renewable energy procurement market in China for three consecutive years and released its third State of the Market report in 2019.

Leading in total installed renewable energy capacity across the globe, China’s power market is undergoing continuous reform; however, mechanisms available for corporates to procure renewable energy now remain limited. This annual report discusses major policies in 2019, including the release of the Renewable Portfolio Standard, the development of subsidy-free projects, and the introduction of auction mechanisms for subsidized projects, along with their respective implications on corporate procurement. BRC China classified different corporate renewable procurement mechanisms based on their availability and analyzed in detail each of these mechanisms and their respective changes in 2019. The report suggest that corporates refer to different criteria, such as scale, economics, availability, and additionality, to select the portfolio of solutions that fit their corporate strategy in both the short term and the long term.

Looking forward, with the continuous power market deregulation, we believe corporate demand will play a more and more important role in integrating renewable energy into the grid, while helping China both drive renewable energy costs down to grid parity and reduce curtailment.