1、Green power trading：Accelerating green energy consumptionSeptember 2023121 Green power consumption2 Green power trading in ChinaCONTENTS51.1 Concerted global action on climate change1.2 Green power and Energy Attribute Certificate(EACs)1.3 Difference between green power trading and EAC transactions2

2、.1 Green power price composition and trends2.2 Eligibility of renewable energy sources2.3 Progressive development of green power trading market67892.4 Participants in the green power market2.5 Inter-and intra-provincial green power trading.6 Negotiation,listing,and centralized bidding tra

3、ding modes2.7 The green power trading process2.8 International green power trading:US Market1617202.9 International green power trading:EU Market212.10 Domestic green power trading statistics and examples223 The Chinese Green Electricity Certificate(GEC)market253.1 GEC definition and regulation3.2 P

4、rogressive development of the GEC system3.3 Comparison of existing and new GEC policies3.4 Eligibility for GEC issuance3.5 Market mechanism for GEC transactions3.6 GEC prices3.7 GEC trading statistics and trends3.8 GEC and international certificates3.9 GEC transaction examples2628293031323334354 Mar

5、ket outlook4.1 Challenges remain despite current achievements4.2 Increasing international recognition of the GEC scheme4.3 Further GEC and green power trading stimulation expected373839455 Recommendations for corporate power consumers465.1 Stay updated with electricity and carbon market developments

6、475.2 Take Action:Strategize,design,and execute49In the context of the dual carbon initiative in China,green power consumption will become a crucial driver for sustainable development,contributing to both the industrys economic benefits and environmental rights.We should expedite the development of

7、the green power consumption market through the promotions from policies and the market,enhance international integration,and promote Chinas distinctive approach towards driving green and sustainable development.Alex ZhuGreater China Energy&Resources Market Segment Co-LeaderGreater China Decarbonizat

8、ion Taskforce Leader“”Green power trading：Accelerating green power consumptionExecutive summaryHuman activities have caused climate change,leading to significant impacts on extreme weather events and global climate patterns.As a result,both social systems and ecosystems have become more vulnerable.T

9、he severe and unsustainable consequences of these changes are gaining attention and recognition within human society.The global consensus and collective efforts of nearly 200 countries to combat climate change and address its impacts is a remarkable achievement following the Paris Agreement.In 2021,

10、over 120 countries and regions have committed to achieving net-zero emissions or carbon neutrality targets.These goals will undoubtedly drive energy technology advancements and green industrial revolution.The transition to sustainable energy,prioritizing the efficient harnessing and utilization of r

11、enewable energy,will present both challenges and opportunities to human society.Green power consumption will gradually shift from a mere trend to mainstream.EY remains committed to participate in Chinas energy transition journey.Our primary objective is to support companies in their low-carbon trans

12、formation and promote the development of green industries through our services.In line with this commitment,this report titled Green power trading:Accelerating green energy consumption(“white paper)have been prepared to share our insights and overview of Chinas green power market.We hope to promote

13、accurate knowledge,guide public action,and facilitate the orderly development of the green power trading market,which would contribute towards the steady progress of Chinas dual carbon target.This white paper provides a comprehensive policy overview,accomplishments,and global market practices pertai

14、ning to green power trading,with a focus on practical considerations and insights.We strongly believe that as policies continue to advance,green energy certificates and green power trading will become credible and effective options for companies to reduce their carbon footprint.China plays a pivotal

15、 role in tackling climate change.Chinese ingenuity through international collaboration will continue to aid worldwide efforts in global warming.As the Chinese green power trading market continues to develop and mature,it will provide substantial support for global emissions reduction efforts and ser

16、ve as a catalyst for decarbonizing industries and international supply chains.41Green power consumptionGreen power trading：Accelerating green power consumption61.1 Concerted global action on climate change6In recent years,climate change induced by human activities has caused numerous extreme weather

17、 and climate events in every region of the world,exacerbating the vulnerability of both society and ecosystems.The unsustainable and severe consequences resulting from these changes are increasingly being recognized and addressed by human society.The Intergovernmental Panel on Climate Change(IPCC)in

18、 its Sixth Assessment Report highlights that over the past century,global temperatures have been steadily rising due to factors such as the burning of fossil fuels,unequal and unsustainable energy use,and land utilization.The report states that global temperatures have already risen by 1.1 degrees C

19、elsius compared to pre-industrial levels.On 22 September 2020,President Xi Jinping announced during the United Nations General Assembly that China aims to peak its carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060.This commitment reflects Chinas proactive approach to add

20、ressing climate change and its role as a responsible large nation in promoting the construction of a community with a shared future for humanity.Over 190 countries worldwide once again reached a high consensus and jointly responded to global climate change.As of early 2021,more than 120 countries an

21、d regions globally have set net-zero emissions or carbon neutrality targets.Major global corporations have also made commitments toward carbon neutrality and actively fulfilled their environmental obligations from the perspective of their own businesses.Under the backdrop of Chinas dual carbon goals

22、,the countrys energy structure continues to undergo sustained adjustments,with national plans and measures to promote the transformation towards green and low-carbon energy becoming increasingly clear.In 2022,the country released the 14th Five-Year Plan for Renewable Energy Development,which explici

23、tly emphasized the importance of market-oriented mechanisms.It further emphasized the decisive role of the market in resource allocation and outlined the future trend of creating a fair and competitive market environment.Green electricity certificates(GECs)transactions and green power trading are cu

24、rrently the main market mechanisms available for realizing green power consumption in China.“(This report is)The alarm bells are deafening”，“This report must sound a death knell for coal and fossil fuels,before they destroy our planet”Antonio Guterres-U.N.Secretary-GeneralGreen power trading：Acceler

25、ating green power consumption71.2 Green power and Energy Attribute Certificate(EACs)7Green power refers to the electrical power generated from renewable energy sources.Green power trading aids the development of the renewable energy industry,facilitates the establishment of new power systems,and pro

26、motes the socio-economic transition toward a low-carbon future.In September 2021,the National Development and Reform Commission(NDRC)and the National Energy Administration(NEA)officially approved the pilot program for green power trading,marking the initiation of green power trading in China with Ch

27、inese characteristics.Subsequently,in January and May 2022,the Guangzhou Power Exchange Center and the Beijing Power Exchange Center respectively issued the Implementation Rules for Green Power Trading,providing detailed guidelines on the organizational structure,pricing mechanisms,settlement proces

28、ses,and GEC transfers,thereby establishing the systematic operation of green power trading.The current focus is on enhancing market orientation and the establishment of long-term mechanisms,aiming to facilitate the orderly advancement of green power trading.This endeavor represents a significant ste

29、p toward promoting the sustainable development of the renewable energy sector and fostering the transition to a low-carbon economy.Energy Attribute Certificates(EACs)are used for documenting and tracking the exact location where the renewable energy is produced.EAC schemes allow end-users to make cl

30、aims about their renewable energy usage,which requires considerations in terms of measurement accuracy,data traceability and integrity,uniqueness and exclusivity of the EAC issuance,in order to be credible.In 2001,the first EAC scheme was pioneered by the Netherlands,followed by over 20 countries in

31、cluding the United States,Japan,the United Kingdom,and Australia.To date,EAC schemes that have gained recognition include government-issued Renewable Energy Certificates(RECs)in North America,Guarantees of Origin(GO)in the European Union;international organizations such as the The International REC

32、Standard(I-REC Standard)issuing International Renewable Energy Certificates(I-REC)based on the I-REC Standard,and global renewable energy trading tools such as APX Tigrs.In January 2017,the NDRC,Ministry of Finance(MoF),and the NEA jointly issued the Notice on the Pilot Implementation of the green e

33、lectricity certificate Issuance and Voluntary Trading System for Renewable Energy(NDRC Energy 2017 No.132).This policy marked a significant milestone in the establishment of China EAC scheme.Commencing from July 2017,the nationwide pilot program introduced the use of GECs as a means to promote the c

34、onsumption of renewable energy,encourage the development wind power and photovoltaic generation,and reduce industry reliance on renewable energy subsidies.Green power trading：Accelerating green power consumption81.3 Difference between green power trading and EAC transactions8Green power trading and

35、EAC transactions both support companies in making renewable energy usage claims.However,the difference lies in whether the EACs are“bundled”with electricity supply and consumption.EACs certifies environmental attributes for green power.Renewable energy generation companies sell EACs to materialize f

36、inancial benefits,while buyers of EACs acquire the rights to make claims on their energy usage.EAC transactions does not rely on the physical delivery of green power and is referred to as unbundled.Alternatively,green power trading achieves the transfer of environmental attributes from renewable ene

37、rgy sources to the consumer through the bundling of EACs with power purchase agreements(PPAs).This approach ensures transfer of environmental attributes are“bundled”with physical delivery.8 8Electricity generator(Supply)Local consumersPower GridEAC(1 certificate corresponds to 1 MWh)Bundled with ene

38、rgy contracts（PPA）UnbundledPublic utilitiesConsumersTransfer of environmental attributes to corporate consumersElectricity transmission through the gridPhysical electricity consumptionTransfer of environmental attributesFigure 1.1：Environmental attribute transfer and physical electricity settlement

39、associated with green power trading2Green power trading in ChinaGreen power trading：Accelerating green power consumption102.1 Green power price composition and trendsOn 28 August 28 2021,the NDRC and the NEA issued a reply regarding the pilot work plan for green power trading(NDRC 2021 No.1260),whic

40、h approved State Grid Corporation and Southern Power Grid Company to carry out pilot green power trading platform.It proposed that green power purchased from grid companies from renewable projects eligible for subsidies shall be sold and billed by the grid companies on behalf of generation companies

41、,and the revenue premium shall be used to offset subsidies.If generation companies forfeit its subsidies,the revenue premium shall belong to the generation parties.The revenue premium generated from renewable projects guaranteed to connect to the grid shall be separately accounted for and used exclu

42、sively for the development of power networks.The NDRC has issued a policy stating that starting from 2021,new registered wind power and solar PV projects would no longer receive subsidy.As such,renewable projects with non-subsidized tariff prices can earn a premium through green power trading.Accord

43、ing to the Implementation Rules for Green Power Trading at Beijing Power Exchange Center(Revised Draft),green power trading prioritizes non-subsidized wind power and solar PV projects and projects that forfeit subsidies,which means projects without subsidies will have prioritized trading.The differe

44、ntiation between green power and regular power is in the environmental attributes.Green power trading increase the revenue of renewable energy projects,promotes the high-quality development of the renewable industry value chain,and provides reliable procurement options for consumers.Generation price

45、 for green power consists of the electricity price and the environmental attribute premium.According to Beijing Power Exchange Center,the current green power price is observed to achieve a premium of 0.021 to 0.106 yuan/kWh against the benchmark coal-fired electricity price at 0.3598 yuan/kWh.End-us

46、er green power price=green power generation price+transmission&distribution cost+power loss costs+system operation costs+government funds+surchargesGreen power generation price=Electricity price+Environmental attribute premiumThe electricity price and the environmental attribute premium of green pow

47、er are settled separately.The settlement for physical energy is calculated based on inter-provincial and intra-provincial market trading rules,while settlement of environmental attribute premiums is determined by taking the minimum value among a)contracted electrical energy for the month;b)contracte

48、d generators grid-connected electrical energy generated;and c)energy consumption of electricity users.Source:Beijing Power Exchange Center,“Chinas green power Market Construction Practice and Related ThoughtsGreen power trading：Accelerating green power consumption11Renewable energy sources eligible

49、for green power trading was initially limited to concentrated wind and solar,but is expected to expand to include a wider range of renewable energy technologies.Green powerrefers to the renewable energy generated by wind,solar,and other renewable energy generation companies that meet national policy

50、 requirements.Green power is also a type of power commodity that can gradually expand to hydropower or other eligible sources of electricity.Green power tradingis a mid-to-long-term trading of electricity with green power products as the underlying assets to meet the needs of market entities such as

51、 power generation enterprises,power sales companies,and electricity users.It provides green power consumption certificate(not GEC)to electricity users who purchase green power products and prioritizes organization,arrangements,execution,and settlement in the electricity market trading and grid dispa

52、tching operation.Green power consumption certificate is issued by power exchange centers to enterprises that have purchased green power.It certifies green power consumption and is unique and exclusive to a particular electricity settlement.For example,within the State Grids jurisdiction,after an ent

53、erprise purchases and consumes green power,power exchange centers run by State Grid can query the green power consumption certificate on the e-trading platform.The certificate will provide detailed information such as the consumer,supplier,consumption period,consumption volume,and type of electricit

54、y,as well as a QR code for blockchain-based traceability.On 25 January 2022 and 10 August 2023,Guangzhou Power Exchange Center and Beijing Power Exchange Center issued green power trading rules respectively,which defined the scope of green power trading in detail.The scope of green power trading in

55、the southern grid region,represented by the Guangzhou Power Exchange Center,includes onshore centralized wind power and solar PV projects,while the scope within the State Grid operating area,represented by the Beijing Power Exchange Center,includes wind power and solar PV projects(Table 2.1).2.2 Eli

56、gibility of renewable energy sourcesSource:Southern Regional green power Trading Rules(Trial),Implementation Rules for green power Trading atBeijing Power Exchange Center(Revised Draft)Green power trading：Accelerating green power consumption12According to the Notice on Promoting Full Coverage of Ren

57、ewable Energy green electricity certificates and Encouraging the Development of Renewable Energy Power Consumption(referred to as NDRC and NEA 2023 No.1044 or the New Policy)issued in August 2023,efforts are being made to achieve full coverage of GEC and encourage the development of green power trad

58、ing.However,no documents have been issued yet to expand the applicable scope of green power projects.It was also learned from interviews with the exchanges that the current scope of green power trading is still implemented according to the project scope specified in the existing policies,and will be

59、 adjusted in a timely manner in accordance with policy changes.2.2 Eligibility of renewable energy sources(continued)Time Issuing AgencyPolicyEligibility2022.1.25Guangzhou Power Exchange CenterSouthern Regional green power Trading Rules(Trial)Onshore centralized wind power,Solar PV2023.8.10Beijing P

60、ower Exchange CenterImplementation Rules for green power Trading at Beijing Power Exchange Center(Revised Draft)Wind power,Solar PVTable 2.1:Renewable sources eligible for Green Power Trading in China Green power trading：Accelerating green power consumption2.3 Progressive development of green power

61、market132021.082022.012022.02Reply On The Pilot Platform For Green Power Trading(NDRC Reform 2021 No.1260)On 28 August 2021,the NDRC and the NEA issued a reply regarding the pilot work plan for green power trading,approving State Grid Corporation of China(SGCC)and China Southern Power Grid(CSG)to ca

62、rry out green power trading pilots.On 7 September 2021,nationwide green power trading was fully launched.Opinions on Accelerating the Construction of a Unified National Electricity Market System(NDRC&NEA 2022 No.118)Opinions on Improving the System Mechanisms and Policy Measures for Energy Green and

63、 Low-Carbon Transformation(NDRC&NEA 2022 No.206)On 18 January 2022,the NDRC and the NEA issued the opinions with the goal of achieving the preliminary establishment of a unified national electricity market system by 2025,which includes a significant increase in the scale of market-oriented allocatio

64、n of resources across provinces and regions,as well as green power trading.On 30 January 2022,the NDRC and the NEA further proposes the improvement of power exchange mechanisms for the utilization of renewable energy and the implementation of pilot programs for green power trading.It encourages rene

65、wable energy generators to enter into long-term power purchase agreements with users or power sales companies.Additionally,it promotes the purchase of green power by industrial parks and companies through the electricity market.Notice on Accelerating the Construction of Electricity Spot Market(NDRC

66、Reform 2022 No.129)On 21 February 2022,the notice was issued to promote the participation of renewable energy in market transactions in an orderly manner and coordinate efforts to advance green power trading.Notice On Issues Related To Subsidized Green Power Projects Participating In Green Power Tra

67、ding(NDRC Reform 2023 No.75)On 15 February 2023,the NDRA,the MoF,and the NEA issued the notice(NDRC Reform 2023 No.75),which clarifies that the green power premium and GEC income cannot be obtained at the same time as subsidies.Notice on Ensuring Full Coverage of Renewable Energy green electricity c

68、ertificates and Promoting Renewable Energy Power Consumption(NDRC and NEA 2023 No.1044)On August 3,2023,NDRC,the MoF,and the NEA jointly issued the New Policy clearly encouraging the consumption of green power and guides the entire society to expand its consumption of renewable energy.2023.022023.08

69、Green power trading：Accelerating green power consumption2.4 Participants in the green power market14Trading entities collaborate closely with operational institutions to co-develop the green power market.Market participants in the green power market are divided into trading entities and operational

70、institutions.The trading entities include generation companies,electricity consumers,and power retail companies.Generation companies:Primarily renewable energy generation companies that meet eligibility,such as wind power and solar PV power companies.Electricity consumers and power retail companies:

71、Electricity consumers mainly refer to businesses that have a demand for green power consumption and certification,and are willing to pay for green power.Power retail companies purchase green power and sell to end users who have a demand for green power consumption.Operational institutions in the mar

72、ket include power exchange centers,institutions responsible for renewable energy settlement,dispatch organization,transmission companies,and the National Renewable Energy Information Management Center(NREIMC).Power exchange centers:The Beijing and Guangzhou Power Exchange Center not only handles int

73、ra-provincial transactions,but also organizes inter-provincial green power trading,issues relevant settlement basis,and carries out related information disclosure.They also administer and manage inter-provincial green power trading contracts and settlement rules.Each provincial-exchange center is re

74、sponsible for providing registration services,organizing intra-provincial green power trading,issuing relevant settlement basis,and carrying out related information disclosure.They also aggregate the demand information of intra-provincial electricity consumers and generation companies participating

75、in inter-provincial green power trading.Electricity dispatch organization:Responsible for verification of green power transactions,providing safety constraints,arranging reasonable operation modes,and giving priority to executing green power transaction contracts.Transmission companies:Provincial tr

76、ansmission companies aggregate the demand of electricity consumers and retail companies within the province,and purchase green power across provinces to provide fair power supply services to electricity consumers.National Renewable Energy Information Management Center:Responsible for issuing GECs to

77、 generation companies.Based on the actual production and consumption of renewable energy,it transfers batches of certificates to the corresponding exchange center.WindPowerSolar PVGridTrading CentersGreen power trading：Accelerating green power consumption15In addition to the Beijing Power Exchange C

78、enter and Guangzhou Power Exchange Center,other provincial power exchange centers can also conduct green power trading,but only within their own provinces.When it comes to inter-provincial green power trading,other provincial centers need to submit relevant transaction information to the Beijing or

79、Guangzhou Power Exchange Centers for organized green power trading.Intra-provincial green power trading refers to electricity consumers and power retailcompanies purchasing green power from local generation companies through direct power trading.Provincial power exchange centers organize such tradin

80、g within certain periods(e.g.,annually,monthly,or intra-monthly).Inter-provincial green power trading refers to electricity consumers or power retail companies purchasing corresponding green power in other provinces.The demand for intra-provincial green power trading is aggregated by transmission co

81、mpanies so that unified procurement of green products across provinces can be conducted.The State Grid occasionally issues inter-provincial trading notices within its regions.Companies that meet the requirements and have registered with the trading center can sign up to participate in inter-provinci

82、al trading.In the Southern Grid region,intermittent inter-provincial trading has been opened between Guangdong Province and Hainan Province,but inter-provincial trading with other provinces within the region has not yet been established.The Beijing Power Exchange Center is responsible for:North Chin

83、a(Beijing,Tianjin,Hebei Province,Shandong Province,and Shanxi Province)East China(Shanghai,Zhejiang,Anhui,Jiangsu,and Fujian)Northeast China(Liaoning,Jilin,Heilongjiang,and Inner Mongolia)Central China(Hubei,Hunan,Jiangxi,and Henan)Southwest China(Chongqing,Sichuan,and Tibet)Northwest China(Shaanxi,

84、Gansu,Qinghai,Ningxia,and Xinjiang)The Guangzhou Power Exchange Center is responsible for：Guangdong,Guangxi,Yunnan,Guizhou,Hainan Source:Telephone interviews with Beijing Power Exchange Center and Guangzhou Power Exchange Center2.5 Inter-and intra-provincial green power tradingGreen power trading：Ac

85、celerating green power consumptionThe current green power trading can be conducted through three modes:bilateral negotiation,listing trading,and centralized bidding,as illustrated in Table 2.2.The difference between inter-provincial and intra-provincial trading is that intra-provincial trading can c

86、hoose from three methods,namely bilateral negotiation,listing or centralized bidding during each trading cycle.In inter-provincial trading,bilateral negotiation is the primary method used on an annual trading basis,with centralized bidding or listing as the secondary methods;only centralized bidding

87、 or listing methods are allowed to be used for intra-monthly(rolling weekly or daily)trading.16Power Exchange CentersTrading modesSpecific contentBeijing Power Exchange CenterBilateral negotiation tradingMarket participants independently negotiate on quantity(i.e.,electrical energy),price,and compen

88、sation methods for green power environmental attributes.They then declare,confirm,and clear transactions through the green power trading platform.Listing tradingOne market participant declares the trading quantity,price,and other listing information through the green power trading platform.Another m

89、arket participant then confirms and clears the transaction by delisting.Centralized bidding trading*Both buying and selling market participants declare the trading quantity(electricity),price,and other information through the green power trading platform.The transactions are matched and cleared base

90、d on the bidding mechanism to generate trading outcomes.Guangzhou Power Exchange CenterNegotiated tradingMarket participants independently negotiate their intent for quantity,price,and other trading requirements,and confirm transactions through the trading platform when agreement is reached.Listing

91、tradingMarket participants declare the quantity,price,and other necessary listing information through the trading platform.Other market participants then confirm the transactions by delisting,resulting in trading outcomes.BiddingMarket participants declare the quantity,price,and other information th

92、rough the trading platform.Trading outcomes are then generated based on the clearance rules.Note:centralized bidding trading is a green power trading method that was introduced in the revised version of the Implementation Rules for green power Trading of Beijing Power Exchange Center released on 10

93、August 2023,compared to the previous version of the Implementation Rules for green power Trading of Beijing Power Exchange Center.Table 2.2:Green Power Trading Modes2.6 Negotiation,listing,and centralized bidding trading modesGreen power trading：Accelerating green power consumptionBundling is achiev

94、ed through the coordinated management of renewable energy projects by the NREIMC,the allocation of GECs and green power consumption certificates by the power exchange centers,and the binding of medium-to long-term agreements.The transaction process is illustrated in Figure 2.1.17Compile and submit r

95、elevant requirementsThe NREIMC issues GECs,which are then apportioned and transferred to power consumers by Beijing or Guangzhou Power Exchange Center.7The Beijing or Guangzhou Power Exchange Center releases the transaction results and issues green power consumption certificates.Each provincial powe

96、r exchange center collects transaction information and submits it to the Beijing or Guangzhou Power Exchange Center.3The Beijing or Guangzhou Power Exchange Center conducts green power trading activities.Market participants register green power trading accounts on the green power trading platform.Po

97、wer consumers or generators submit green power trading requirements;Power Exchange Center periodically releases trading announcements.Green Power Trading ProcessNational RenewableEnergyInformationManagementCenterGreen power trading information registrationCentralized GEC issuanceTransmission Company

98、Beijing and Guangzhou Power Exchange CentersCompile and submit relevant requirementsProvincial powerexchangecenterPower supplyGeneratorsPower consumersPower retail companiesMarket participants124The Beijing/Guangzhou Power Exchange Center summarizes trading data,and the dispatching agency verifies t

99、he electricity volume.5Submitrequirements62.7 The green power trading processFigure 2.1:Green power trading process(using inter-provincial trading as example)Consumption certificate issuance and GEC transferGreen power trading：Accelerating green power consumption182.7 The green power trading process

100、(continued)Green power trading processStep 1:Power consumers,generation companies,and power retail companies need to register and create a green power trading account at the respective power trading centers.The registration information is shared among the power trading centers in different provinces

101、(but the registration information is only shared within the Southern Grid or the State Grid region,and the two regions are not interconnected).Each account includes contract information,settlement information,green power consumption certificate information,as well as information related to GEC issua

102、nces and transfers.Power consumers who purchase green power through transmission companies should complete the registration procedures at the Beijing or Guangzhou Power Exchange Center.Step 2:For intra-provincial trading,each provincial trading center regularly conducts green power trading within th

103、e province.After announcing on the green power trading platform,market participants declare information on electricity quantity,price,and other details according to specified timelines.In terms of inter-provincial trading,power consumers,retail companies,and generation companies submit specific dema

104、nds for green power trading through the trading platform.Step 3:Each provincial center collects the declared green power trading volume(i.e.,electrical energy)and price from power consumers,retail companies,and generation companies,and submits the relevant trading information to the Beijing or Guang

105、zhou Power Exchange Center after consolidation.Step 4:Based on the received trading information,the Beijing or Guangzhou Power Exchange Center organizes and conducts green power trading activities,taking into consideration the inter-provincial transmission capacity and power supply capabilities.Step

106、 5:After consolidating the specific data of green power trading,the Beijing or Guangzhou Power Exchange Center submits it to the respective provincial power centers for electricity quantity verification,followed by clearing and publishing the unconstrained results to the Beijing or Guangzhou Power E

107、xchange Center by relevant provincial center.Step 6:The Beijing or Guangzhou Power Exchange Center submits the unconstrained trading outcomes to the dispatching agency for verification,after which the center publishes the constrained trading outcomes and sends them to the provincial centers correspo

108、nding to the purchasing and selling parties respective regions.Simultaneously,the trading platform automatically issues green power consumption certificates to the buyers of green power.Green power trading：Accelerating green power consumptionStep 7:The National Renewable Energy Information Managemen

109、t Center issues GECs to power generators and transfers them to the trading center,which then transfers the certificates to power users through the trading platform.“Certificate bundling“and“Credible traceability“The New Policy aims to achieve wider coverage of renewable sources and promotes the deve

110、lopment of green power trading.As such,the scope of applicable projects for green power trading is expanded,which increases supply,thus allowing green power consumers to procure“bundled”certificates.To achieve credible traceability,both the Southern Grid and the State Grid are utilizing blockchain t

111、echnology for green power trading.Blockchain technology enables the recording of data throughout the entire process,which helps avoid duplicate measurement of purchased green power,allowing for accurate traceability.This guarantees the credible traceability,and transparency of the GECs obtained duri

112、ng the transactions.The whole life cycle tracking of green power ensures that users purchase genuine green power.It also ensures the alignment between green power production and consumption in terms of economic benefits and electricity flows.2.7 The green power trading process(continued)19Green powe

113、r trading：Accelerating green power consumptionThe US electricity market emerged in the 1990s.Through the active participation of various market participants and the promotion of state governments,both mandatory and voluntary markets with flexible procurement methods for clean energy consumption has

114、been developed.Details are shown in Table 2.3.Mandatory market:The US does not have a nationwide mandatory renewable consumption target.Instead,each state sets mandatory targets based on their respective electricity market quotas(RPS,Renewables Portfolio Standard),where suppliers or retailers are re

115、quired to meet a certain percentage of green power supply within a specific time period.REC:Under the RPS,the US Environmental Protection Agency issues RECs to generation companies.Electricity suppliers or retailers can obtain these RECs by purchasing green power from generators or by trading in the

116、 REC market to meet the green power quota,i.e.,RECs as an independent purchase option or product.Third-party verification:The environmental benefits of green power from RECs are independently calculated by third-parties and verified through REC tracking systems.Emission factor:The emission factor fo

117、r the US power grid is published by E-Grid and is based on electricity data from the Clean Air Markets Division(CAMD)of the US government.CAMDs electricity sector emissions data only includes emissions from fossil fuel boilers and turbines(excluding green power).Compared with the US market,GEC syste

118、m has achieved the separation of electricity and certificates,and has confirmed the uniqueness of GECs,endowing them with the dual attributes of accounting tools and commodities.Companies can reduce their own carbon emissions by purchasing unified green power that includes electricity and GECs.20Cer

119、tification scopeParticipation methods of renewable energy companiesMechanisms to avoid double countingGreen power derived from renewable energy projects such as wind,solar,biomass,hydropower,biogas,geothermal,and landfill gas.1.Sign long-term PPAs with users2.Participate in the electricity market di

120、rectlyThird-party verification is conducted to demonstrate that companies have produced or purchased sufficient renewable energy to meet their sales commitments.EAC:REC can serve as a tracking tool for all renewable energy and environmental attributes,and be traded separate from electricity.1.Transf

121、erred with the sale of green power;2.Traded as a standalone productTable 2.3:Green power mandatory market in the USSource:EY Research and analysis,US government website2.8 International green power trading:US MarketGreen power trading：Accelerating green power consumption21Trading MethodsContentMecha

122、nism CharacteristicsMechanisms to avoid double countingGuarantee of origin GOs contains project information.One GO can be issued for every MWh of electricity,and each GO has a unique identification number.1.Only trading between the generating company and the buyer is permitted;2.Trading can be cross

123、-border;3.Trading can be independent of electricity sales;4.The validity period of a GO is 12 months from the date of issuance.Each countrys registry can track the issuance,transfer,and retirement of every GO.When electricity consumers purchase a GO and subsequently trade or use it again,the corresp

124、onding GO is retired in the certificate registry to avoid double counting.The GO system was introduced by the European Union(EU)in 2009 under the first Renewable Energy Directive(2009/28/EC)and was formally implemented within the EU in 2012.The primary purpose of the GO system,as designed by the EU,

125、was to provide end-use electricity consumers with proof of the specific origin of a certain quantity of electricity,rather than to support member states in achieving their individual renewable energy development goals.GOs can be issued for all types of energy sources,including nuclear and fossil fue

126、ls,but this discussion focuses solely on GOs for electricity sourced from renewable energy,as detailed in Table 2.4.Table 2.4:EU Guarantees of Origin(GO)mechanism2.9 International green power trading:EU MarketAs the EU has not widely established mandatory renewable energy quota systems within its bo

127、rders,the primary function of GO is to demonstrate the source of electricity rather than assist companies in meeting their renewable energy quota obligations.The Netherlands and Austria mandate market participants to disclose the sources of the electricity,encouraging consumers to purchase GOs to de

128、monstrate their use of green power.Germany requires electricity suppliers to provide GOs when selling green power and to cancel the corresponding GOs within the system when delivering electricity to consumers,ensuring that the electricity sold is indeed green.The trading of GOs takes place in a volu

129、ntary market and is independent from mandatory trading under quotas in non-member countries such as Norway and Sweden.As there is a great number of member countries within the EU,to facilitate cross-border circulation of GOs where electricity cannot be directly transmitted,GOs are generally traded s

130、eparate from electricity to increase trading flexibility.The green power trading in the European Union serves as a model that combines certification and power trading through the use of GOs.Although GOs were not initially designed exclusively for renewable energy,they effectively bundle electricity

131、with generation origin certification.This approach aligns with the current development in China,where the issuance of GECs is expanding to encompass all renewable sources,and the scope of green power trading is gradually broadening.Green power trading：Accelerating green power consumptionSource:Offic

132、ial website of China Electricity CouncilAccording to the China Electricity Council(CEC),the proportion of domestic green power trading volume to the total national market power trading volume was approximately 0.4%in 2022.Currently,the share of green power trading volume is relatively small,indicati

133、ng low market activity,but this could potentially increase.Jan-Jun,2023 Green electricity tradingTotal electricity trading1%2022Green electricity tradingTotal electricity trading0.4%Figure 2.2:Green power trading in 2022National green power tradingThe CEC released the Summary of National Power Marke

134、t Transactions in the First Half of 2023 on 31 July 2023,which stated that the total electricity traded by various power exchange centers nationwide reached 2,650.11 TWh,increasing 6.7%.Among this,direct power trading accounted for 2,055.79 TWh,including 21.34 TWh of green power which makes up 1%of

135、the total trading volume(as shown in Figure 2.3).In 2022,the total electricity traded nationwide reached 5,254.34 TWh,increasing 39%.Among this,direct power trading accounted for 4,014.1 TWh,including 22.78 TWh green power which makes up 0.4%of the total trading volume(as shown in Figure 2.2).Beijin

136、g Power Exchange CenterOn 21 July 2023,the Beijing Power Exchange Center released the electricity market trading information for the first half of 2023,showing a further expansion in the scale of green power and GEC exchange.In the first half,the State Grid completed 351 transactions of green power,

137、with a trading volume of 38.9 TWh,exceeding the annual target by 30%.A total of 1.42 million GECs were traded,accounting for 72%of the national total during the same period.Among these,the cross-provincial renewable energy trading volume reached 77.9 TWh,representing a 10.6%increase.Zhejiang Provinc

138、ial Power Exchange Center In 2022,the Zhejiang Provincial Power Exchange Center consistently conducted green power trading,achieving a total of 2.576 TWh throughout the year(as shown in Figure 2.4),marking a 611.21%increase from 2021.That year,State Grid Zhejiang Power Company actively promoted the

139、green power market and organized regular green power transactions through a combination of annual+monthly+intra-month formats,leading to the provinces first continuous and normalized opening of the green power trading market.In 2022,29 aggregators represented nearly 2,000 distributed energy sources

140、within Zhejiang,resulting in 239 GWh green power transactions.Figure 2.3:Green power trading Jan-Jun 2023Source:Beijing Power Exchange Center website2.10 Domestic green power trading statistics and examplesUnit:TWh4.2125.79051015202530Power exchange Center in Zhejiang20212022Figure 2.4:Green power t

141、rading in Zhejiang22Green power trading：Accelerating green power consumption23Jiangsu Green Power Exchange CenterIn 2022,the Jiangsu Power Exchange Center actively coordinated inter-provincial and intra-provincial transactions with the Beijing Power Exchange Center,facilitating 75.8 TWh of demand fo

142、r green power,a 25%increase compared with last year.This required 18 TWh of renewable energy from western regions,a 45%increase.Additionally,Jiangsus power market incorporated green power trading for the first time,achieving regular monthly transactions for green power.In September 2022,Jiangsu pion

143、eered on-demand flexible trading for green power,resulting in an annual transaction volume of 2.4 TWh.In the same year,Jiangsu consumers have purchased 760,000 GECs through the power trading platform,ranking first in both single transaction volume and total transaction volume nationwide.Source:State

144、 Grid Jiangsu Province Co.,Ltd.website2.10 Domestic green power trading statistics and examples(continued)Hangzhou Asian Games achieves 100%green power supplyJune 2023,the Hangzhou Asian Games comprehensively launched and implemented green power trading,organizing a total of 16 green power transacti

145、ons with a total electricity consumption of 621 GWh,equivalent to reducing the use of standard coal by about 76,300 tons.By the opening of the Hangzhou Asian Games on 23 September 2023,all venues and the Asian Games Village will achieve 100%green power supply.In order to help create the first carbon

146、-neutral Asian Games,all 65 Asian Games venues and office spaces in Zhejiang used green power,which includes inter-provincial and intra-provincial trading electricity.Inter-provincial trading includes solar PV projects in Qinghai Chaidamu Basin,Gansu Jiayuguan,and Loess Plateau,as well as wind power

147、 in Xinjiang Hami and Bachu.Intra-provincial trading includes the provinces first batch of flat-priced wind power stations in Xiangshan sea area,rooftop PVs in Hangzhou,and poverty alleviation PVs in ChangshanXiaobocun.Green power trading facilitated green power to 48 competitive venues,eight test v

148、enues,and nine office spaces such as the Asian Games Organizing Committee and the Media Center,which are subject to commercial electricity prices.Source:Hangzhou Asian Games websiteGreen power trading：Accelerating green power consumption242.10 Domestic green power trading statistics and examples(con

149、tinued)The Tianjin Summer Davos Forum achieved 100%green power supply for the first timeOn 19 June 2023,under the organization of the Tianjin Power Exchange Center,the venue operator(Meijiang Convention and Exhibition Center)of the 2023 Summer Davos Forum in Tianjin completed a green power transacti

150、on with a renewable energy generation company for a total of 1 TWh electricity.This is equivalent to saving 320 tons of standard coal and reducing 800 tons of emissions.It is the first time that a large-scale event in Tianjin has carried out green power transactions,marking the first time that the v

151、enue for the Summer Davos Forum has achieved 100%green power supply during the event,which will contribute to the green and low-carbon development of the city.The green power used in this forum comes from wind power in the Xilingol area of Inner Mongolia.In addition,this transaction was based on blo

152、ckchain technology of the green power trading platform,ensuring that every unit of green power can be verified and traced,and the corresponding GECs will also be issued in the future.Source:Tianjin Power Exchange Center website3The Chinese Green Electricity Certificate(GEC)marketGreen power trading：

153、Accelerating green power consumption3.1 GEC definition and regulation26GECs are electronic certificates with unique identification codes that serve as“electronic identification cards”for renewable energy electricity.They are specifically issued for the electricity generated by renewable energy proje

154、cts,providing a distinct electronic certification with a unique identification code.Currently,China defines GECs as electronic certificates issued by the national authorities to power generation companies for each megawatt-hour(1 MWh)of renewable energy delivered to the grid.Each individual certific

155、ate is assigned a unique code to ensure proper identification and traceability.1GEC=1,000kWh of renewable energy electricityThe GEC trading system is complementary to the renewable energy quota system.In 2019,the NDRC and the NEA jointly issued the Notice on Establishing and Improving the Mechanism

156、for Ensuring the Consumption of Renewable Energy Electricity,which defined the responsibilities and obligations of green power consumption for each provincial administrative region.Market participants fulfill their consumption obligations primarily through the consumption of green power,but can supp

157、lement(or substitute)their consumption through the following methods:1.Purchasing excess renewable energy electricity consumption quota from market participants who have exceeded their annual consumption targets;2.Voluntarily subscribing GECs corresponding to renewable energy electricity and countin

158、g the equivalent amount as part of their consumption.Corporate GECIndividual GECGECs are divided into subsidized GECs and non-subsidized GECs:Subsidized GECs:certificates generated for non-hydropower renewable energy projects that are eligible for national subsidies.Non-subsidized GECs:certificates

159、associated with renewable energy projects that do not receive subsidies.According to NDRC and NEA 2023 No.1044,GECs associated with the national GEC scheme is the only proof of the environmental attributes associated with green power produced in China.GECs serve as the exclusive credentials for reco

160、gnizing the production and consumption of green power.Furthermore,the GEC scheme supports green development policies,and promotes the consumption of green power.The New Policy further enhances the credibility,exclusivity,and accessibility of GECs.Green power trading：Accelerating green power consumpt

161、ion27Credibility:GECs are under the management of the NEA,ensuring its authoritative oversight.Exclusivity:GECs serve as the sole proof of the environmental attributes of renewable energy electricity in China,establishing their unique role and significance.Accessibility and acceptability:GECs play a

162、 fundamental role in supporting green power trading,verifying and accounting for green power consumption.They also facilitate the connection between GECs and domestic carbon markets,international green consumption,and carbon reduction systems.Source:NDRC&NEA 2023 No.10443.1 GEC definition and regula

163、tion(continued)GECs also possess the characteristic of decoupling electricity from certificates,meaning that GECs can be traded independently from physical electricity.The NDRC and NEA 2023 No.1044 strengthens the connection between GECs and green power trading.Green power trading：Accelerating green

164、 power consumption3.2 Progressive development of the GEC System282017.02Notice on the Pilot Implementation of GEC Issuance and Trading System(NDRC&NEA 2017 No.132)In February 2017,the renewable energy development and utilization targets,as well as the GEC trading system,were established to address t

165、he subsidy shortage,taking GEC revenue as a substitute for subsidies to alleviate the budget deficit created by outstanding subsidies.Notice on Implementing Renewable Energy Power Quota System(draft for seeking opinions)In 2018,a public consultation was initiated for the proposed Renewable Energy El

166、ectricity Quota System.Notice on Actively Promoting non-Subsidized Wind and solar PV projects(NDRC&NEA 2019 No.19)In January 2019,initiatives were implemented to incentivize the non-subsidized wind power and solar PV projects through the utilization of GEC trading,aiming to promote the marketization

167、 of renewable energy projects,enabling their growth without relying on subsidies.Notice on Establishing and Improving the Mechanism for Ensuring the Absorption of Renewable Energy Power(NDRC&NEA 2019 No.807)In May 2019,the renewable energy electricity consumption responsibility was introduced,referr

168、ing to the proportion of renewable energy electricity that should be consumed within each province,aiming to address the contradiction between the rapid growth of generation capacity and the insufficient capacity to absorb and consume it.Several Opinions on Promoting the Healthy Development of Non-H

169、ydro Renewable Energy Generation(MOF 2020 No.4)In January 2020,the subsidy measures for non-hydro renewable energy were clarified and improved.Starting from 2020,newly added offshore wind power and concentrated solar PV projects were no longer eligible for subsidies.Notice on Further Excluding Newly

170、 Added Renewable Energy Consumption from the Total Energy Consumption Control(NDRC&Op 2022 No.1258)In 2022,it was proposed that the increase in renewable energy consumption would not be included in the control of total energy consumption,aiming to enhance the enthusiasm of electricity users in accom

171、modating renewables.GECs act as the fundamental proof for determining the energy consumption.Notice on Ensuring Full Coverage of Renewable Energy green electricity certificates and Promoting Renewable Energy Power Consumption(NDRC and NEA 2023 No.1044)(the New Policy)2019.052019.012018.112020.012022

172、.022023.08Green power trading：Accelerating green power consumption3.3 Comparison of new and old GEC Policies29The NDRC and NEA 2023 No.1044 has made further improvements to the eligibility,methods,and legal status of GECs.This will greatly promote the comprehensive issuance and trading of GECs,layin

173、g a solid foundation for expanding green power supply and promoting green power consumption.The differences between the NDRC and NEA 2023 No.1044 and 2017 No.132 are outlined in Table 3.1.Experts believe that the New Policy will enhance GEC usage,and further stimulate the vitality of the green power

174、 consumption market.It holds significant practical significance in promoting energy transition,creating an environment for green consumption,accelerating the adoption of green production methods and lifestyles,which in turn helps the economy to progressively decarbonize.*资料来源：发改能源【2023】1044号通知，发改能源2

175、017132号2023 No.10442017 No.132ObjectivesAchieve comprehensive coverage of eligible renewable energy sources,facilitate integration with the carbon market,and advancing international recognition.Enhancing the subsidy mechanisms for wind and solar energy,mitigating the direct financial subsidy intensi

176、ty from the national budget.NatureGECs are the sole proof of the environmental attributes of renewable energy electricity.They serve as the exclusive certification for recognizing the production and consumption of renewable energy electricity.GECs are the sole proof for confirming the generation and

177、 attributes of non-hydro renewable energy electricity,as well as the only certification for consuming green electricity.ExclusivityThe electricity associated with GECs cannot apply for other certificates to claim other environmental attributes.N/ASubsidyThe revenue from GECs for non-subsidized proje

178、cts,projects with voluntarily forfeited government subsidies or expired central government subsidiesshall belong to the power generation company or project owner.After wind power and solar PV generation companies sell GECs,the corresponding electricity volume will no longer be eligible for subsidies

179、 from the national renewable energy electricity price surcharge funds.Scope of issuanceAchieving GECs issuance for all electricity generated by nationally registered and documented renewable energy projects.Issuing GECs for onshore wind power and solar PV projects(excluding distributed PV).Issuance

180、criteriaThe data provided by grid companies and power trading institutions serve as the basis for verification,which is cross-checked with the data provided by power generation companies or project owners.Application from the wind power and PV power companies.TradingmechanismEach tradable GEC can on

181、ly be traded once.GECs,once subscribed,cannot be resold or traded again.Table 3.1:Comparison of NDRC&NEA 2023 No.1044,2017 No.132Source:NDRC&NEA 2023 No.1044,2017 No.132Green power trading：Accelerating green power consumption3.4 Eligibility for GEC issuance30According to the New Policy,the eligible

182、scope of GEC issuance has been expanded to include the entire electricity production from nationally registered and documented renewable energy projects.The issuance is based on data provided by transmission companies and power trading centers,which is cross-checked with the data provided by generat

183、ion companies or project owners.The expanded scope covers wind power(including distributed wind power and offshore wind power),solar PV projects(including distributed solar PV and solar thermal power),conventional hydropower,biomass power,geothermal power,and ocean power projects.This expansion aims

184、 to achieve full coverage of GECs.The on-grid electricity generation from centralized wind power(including offshore wind power),centralized solar PV projects(including solar thermal power),distributed wind power,distributed solar PV,biomass power,geothermal power,and ocean power projects are eligibl

185、e for the issuance of tradable GECs.Tradable GECs are currently not issued for existing conventional hydropower projects,but issued for fully marketized conventional hydropower projects that commence operation on or after 1 January 2023.Source:NDRC&NEA 2023 No.1044,EY Research and AnalysisSolar PV(i

186、nclude distributed solar PV,CSPG*)Wind power(include distributed and offshore wind power)Conventional hydropower(only include fully market-orientedprojects newly commissioned after 1 January 2023）Biomass powerGeothermal power Ocean power Tradable GECIssuanceChart 3.1:Scope of tradable GECs*CSPG:conc

187、entrated solar power generationDepartmentResponsibilitiesNEAFormulate rules for issuance and trading of GECs,organize the processes of issuance and trading,and provide implementation oversight.NREIMCAuthorized by the NEA,the NREIMC is responsible for tasks such as managing renewable energy project d

188、evelopment,subsidies,and GEC issuance and trading.The GEC trading platform and Power trading centersOversee and manage green power trading.They facilitate tasks such as GEC transfer,cancellation,and trading while providing market participants with green power verification services.Table 3.2：Responsi

189、ble departments and their responsibilitiesGreen power trading：Accelerating green power consumption3.5 Market mechanism for GEC transactionsGECrefers to the EAC issued by the government to power generation companies for their renewable energy generation.These certificates can be transacted or transfe

190、rred to power consumers at a certain price through a market-oriented approach.The GEC market is divided into two segments:the voluntary market and the mandatory market(yet to be established).The former involves trading on a voluntary platform,while the latter entails transmission companies accountin

191、g for the GECs held by market entities within their jurisdiction,where entities that fail to meet the quota are required to pay compensation.Following the release of the draft for opinions on the renewable energy power quota system by the NEA in November 2018 and the MOF&MOC 2020 No.4 notice issued

192、in January 2020 aims to promote GEC trading under the mandatory quota system,the mandatory market has not been established.Table 3.3 illustrates the market participants involved in GEC market.According to the New Policy,GECs will be traded on the GEC trading platform and power exchange centers.Relev

193、ant information will be synchronized in real time with the issuing authority.Transmission companies and power exchange centers will provide the necessary data,while generation companies will verify the same.Purchasing entities will purchase GECs from generation companies or other entities on the tra

194、ding platform,either to meet quota requirements or for voluntary purpose.The trading methods in the voluntary purchase market primarily include bilateral negotiation,listing,and centralized bidding.Responsible Departments and Market ParticipantsTrading CharacteristicsTrading MethodsSell side:Generat

195、ion companies,including wind,solar,hydro,and other forms of renewable energy,that meet the requirements for GEC issuance.GECs can only be traded once.Bilateral negotiation,listing and centralized biddingsBuy side:Power consumers or electricity retailersTransmission:Provincial grid companies responsi

196、ble for services such as meter installation,metering,meter reading,settlement,and billing for the trading process.Table 3.3：Participants in GEC marketRegulatory officesVerify data&issue GECVerify dataConsolidate dataGridconnectionPurchaseGECRegisterGeneration CompaniesPower exchange centersGEC tradi

197、ng platformNREIMCRetail companiesConsumersTransmission CompaniesProvincial energy and price supervisory office CompensationSuperviseTrading platformSynchronizedataPower trading&GEC transferVerify dataApproveChart 3.2:Market mechanism of GEC transactions31Green power trading：Accelerating green power

198、consumption3.6 GEC prices32According to the New Policy,for projects that no longer receive subsidies,the benefits from GECs belong to the power generation companies or project owners.For projects that receive subsidies and enjoy the states guaranteed purchase,the benefits from GECs are offset agains

199、t the subsidies or belong to the state.For projects that are part of market-oriented transactions,the benefits from GECs are deducted in equal amounts from the subsidies at the time of disbursement.GEC prices vary according to the type of certificate:Subsidized GEC price is the trading price of GECs

200、 issued for non-hydropower renewable energy projects that enjoy subsidies,which currently ranges from approximately 100 to 800 yuan per certificate.The price ceiling is determined by the subsidy amount.Non-Subsidized GEC price is subject to negotiation between the parties involved.Non-subsidized GEC

201、 trading began in June 2021,with an average environmental premium of 0.05-0.08 yuan/kWh,i.e.,the price has remained at 50-80 yuan per certificate.By March 2022,non-subsidized GEC transactions accounted for over 95%of the total volume of GEC transactions.Source:NDRC&NEA 2023 No.1044,MOF&MOC 2020 No.4

202、,MOF&MOC 2020 No.426,EY research andanalysisSubsidized projectsNon-Subsidized projectsGreen power priceSubsidy/GEC priceGEC priceChart 3.3:Green power value chartBenchmark electricity priceThe market trading price of electricityAccording to MOF and MOC 2020 No.4,and the supplementary notice(No.426)r

203、egarding matters related to promoting the healthy development of non-hydropower renewable energy generation,the settlement rules for the subsidy funds for renewable energy generation are based on the on-grid electricity price for the electricity generated within the subsidized electricity volume thr

204、oughout the projects lifecycle.Subsidies are provided based on the actual electricity generated by the renewable energy project for the current year,as long as it does not exceed the approved reasonable utilization hours within the projects lifecycle.The calculation method for the subsidy,which is t

205、he upper limit of the transaction price for a GEC,is illustrated in Table 3.4.The Upper Limit of the Price*=（Renewable Energy Price*-Local Benchmark Coal-fired Electricity Price）/（1+VAT）*Upper limitof the transaction price for a GEC*Taking into accountthe price determinedthrough competitivemethods s

206、uch as biddingTable 3.4：The formula for calculating the GEC priceGreen power trading：Accelerating green power consumption333.7 GEC trading statistics and trendsThe GEC market is still in its early stages.Since the implementation of the GEC scheme in 2017,the GEC market in China has experienced a pro

207、longed period of low activity.Despite large issuance and listing volume of GECs,the trading rate remains low.The provincial performance is illustrated in Chart 3.5.Despite substantial issuance and listing of GECs,trading volume remains low:According to data from the GEC trading platform,since its of

208、ficial launch in July 2017 until February 2022,the average trading rate of GECs nationwide(the ratio of trading volume to listing volume)was 5.54%.Domestic GEC prices are relatively high:Subsidized projects have significantly higher GEC prices compared to non-subsidized projects.Although national su

209、bsidies ceased for solar PV projects in 2021,some local subsidies still exist.Moreover,the GEC prices in China remain relatively high compared to I-RECs.According to the International Institute of Green Finance(IIGF)at Central University of Finance and Economics,the domestic GEC price is generally 5

210、0 yuan/MWh higher compared to I-REC,with prices quoted by the Sustainable Development Research Center at Fudan University to be 1.41-3.93 yuan/MWh.Voluntary subscription require commitment to 100%renewables:Since the initiation of voluntary subscription trading in 2017,GEC trading has remained prima

211、rily in the voluntary market,with participation mainly from enterprises committed to achieve 100%green power consumption.Enterprises purchasing GECs in the voluntary market have strong environmental awareness and incur corresponding costs.Source:GEC exchange platform,Fudan University Sustainable Dev

212、elopment Research Centers August 2023 I-REC price index,EY research and analysisChart 3.5：GEC trading data0%10%20%30%40%50%60%70%80%90%03,000,0006,000,0009,000,00012,000,00015,000,00018,000,000HebeiJilinHeilongjiangShandongGansuLiaoningNeimengguNingxiaXinjiangAnhuiJiangsuShanxiGuangxiQinghaiGuangdon

213、gShaanxiHubeiYunnanJiangxiHenanGuizhouHunanSichuanHainanFujianTianjinZhejiangXizangXinjiang BingtuanBeijingIssuance VolumeListing VolumeTrading VolumeTrading RateGreen power trading：Accelerating green power consumption3.8 GEC and international certificatesTypeRE100 RecognitionProject ScopeVoluntary/

214、MandatoryMultiple TradingValidityGECConditional*Subsidized or unsubsidized wind and solar PV projects,excluding offshore wind power and distributed PV project for now*Voluntary mainlyNoN/AI-RECYesFrom 2023 onwards,only accept unsubsidized renewable energy projects and applications from non-state-own

215、ed projects.Prior to that was primarily about subsidized GECsVoluntaryYesN/AAPX TIGRYesUnsubsidized renewable energy projectsVoluntaryYes21 monthsGOYes Provide evidence of sources to end users regarding the specific quantity of electricity,including nuclear energy and fossil fuels,excluding electric

216、ity generated through fixed-price subsidies or premium policiesVoluntaryYes12 monthsRECYesThe scope varies among states with general acceptance of wind,solar PV,and biomass energy,but varying viewpoints on projects like tidal and geothermal energy.Voluntarymainly,mandatory quotas parallelNo730 daysR

217、E100s requirement is one of the most widely recognized international guideline for EACs.It requires member companies to make commitments to renewable energy procurement.Currently,I-REC,RECs,and GOs are recognized by RE100,while other EACs need to meet six requirements,including credible generation d

218、ata,attribute aggregation,exclusive ownership of attributes,exclusive claims on attribute,geographic market limitation of claims,and vintage limitations of claim.The comparison of major EACs is shown in Table 3.4.*RE100s technicalassessment report on GEC,which was released in August 2020.*The scope

219、at the time of the RE100 assessment.Table 3.4:Comparison among international EACsCurrently,GECs are only allowed to be transferred once,and the scheme still lacks secondary market trading mechanisms.Shortcomings in terms of timeliness and double counting have been identified.Chinas GEC scheme starte

220、d late compared to other international EAC schemes,but are gradually catching up to international standards.In particular,the New Policy has firmly addressed the shortcomings identified.Moreover,if a secondary exchange market for GECs can be established in the future,it would greatly enhance the act

221、ivity level of the GEC market.34Green power trading：Accelerating green power consumption353.9 GEC transaction examplesA State-Owned Marketing Company Facilitates the First GEC Trading in Hainan ProvinceOn 21 April 2023,a state-owned power retail company facilitated the first GEC transaction in Haina

222、n Province.The transaction involved a total of 300 GECs,corresponding to the green power generated by a agricultural photovoltaic+energy storage demonstration project(100 MW generation capacity)in December 2022,totaling approximately 300 MWh.This is equivalent to reducing 196,950 kgof carbon dioxide

223、,141 kg of sulfur dioxide,and 129 kg of nitrogen oxide emissions.With the support of Guangzhou Power Exchange Center,the Hainan Power Exchange Center initiated regular green power subscriptions and GEC transactions in March 2023.The supervisory authorities for this GEC exchange included the energy r

224、egulatory department of Hainan,energy regulatory agencies,the Southern Power Grid Hainan Company,and other market entities.On 21 April,the power retail company successfully completed the first GEC transaction in Hainan with an industrial company as the counterparty.This GEC transaction,together with

225、 the completion of the first green power transaction in Hainan Province,represent a significant milestone for accelerating green power consumption.Source:Beijing Electricity,https:/ Electricity CertificateGreen power trading：Accelerating green power consumption36A multinational high-tech companys pr

226、ocurement of GECs The multinational high-tech company is an advocate of green supply chain and environmental protection,and has well established processes in place to achieve 100%renewable goals.The company has joined organizations such as SBTi and RE100,and places great importance on reporting the

227、CDP Climate Change questionnaire.The company is known for having stringent supply chain management practices,with energy efficiency and decarbonizing the supply chain as a key focus.Suppliers undergo rigorous and thorough evaluations procedures,and failure to meet the requirements will result in dis

228、qualification.EAC verification and retirement is an essential means for the suppliers to achieve renewable energy usage.According to the companys 2023 Annual Environmental Progress Report released in April 2023,the company procured Renewable Energy Certificates(RECs),including GOs,Large-scale Genera

229、tion Certificates(LGC)from Australia,and Green Electricity Certificates(GEC)from China,but no I-REC has been sourced.Record shows that as of November 2022,the companys procurement and operations management company in Shanghai procured 390,000 GECs.Following the issuance of the New Policy,it is envis

230、aged that the companys suppliers in China may consider the shift towards procuring more GECs.Record of GEC TradingSource:SinaFinancehttps:/ Research and Analysis3.9 GEC transaction examples(continued)A multinational high-tech company390,000 GECs4Market outlook Green power trading：Accelerating green

231、power consumption384.1 Challenges remain despite current achievementsCredibility of the GEC scheme needs to be established through continuous improvement and better education both domestically and internationally.International integration:The lack of an unified internationally accepted standard for

232、EACs poses challenges to ensure credible renewable energy usage claims.In particular,questions will continue to be raised by power consumers as a result of lake of integration of EAC schemes at the international level.This in turn impacts the enthusiasm of multinational companies to participate in g

233、reen power trading.Double counting issue:There are concerns about potential double counting of environmental attributes between GECs,green power,and(China Certified Emission Reduction Schemes(CCERs).The conditional acceptance of GEC by RE100 requires additional verification efforts,which is operable

234、 in theory,but hinders consumers interest to participate in practice.The trading volume of GEC and green power is low despite efforts to accelerate green power consumption.Supply:Existing projects receive high subsidy,which needs to be forfeited if participating in green power or GEC trading.This re

235、duces the willingness of generation companies to enter the green power and GEC trading market.Moreover,the scale of newly commissioned non-subsidized projects is relatively small,resulting in limited overall participation.Price:The environmental premium for non-subsidized green power projects from b

236、oth GEC and green power trading is currently not financially attractive to incentivize generation companies to participate.Demand:Current green power and GEC trading is predominantly voluntary.Participants in the market are mainly companies that have set a 100%renewable energy target(such as RE100 m

237、ember companies,primarily multinational corporations),and companies seeking to lower carbon tax risks through green consumption,and state-owned enterprises voluntarily fulfilling emission reduction obligations.Source:EY research and analysis,RE100Green power trading：Accelerating green power consumpt

238、ion394.2 Increasing international recognition of the GEC schemeRecognized ScopeRecognition Criteria for green powerRenewable energy includes power generated from solar,wind,hydro,geothermal,and sustainably sourced biomass(including biogas)1.Self-generated electricity:Companies generate and consume r

239、enewable energy from their own projects and claim the environmental attribute accordingly.2.Direct transactions with generation companies:Directly purchase renewable energy through physical or virtual power purchase agreements(PPAs)with generation companies.3.Transactions with the supply or sell com

240、panies:This includes scenarios where the electricity supplier sources traceable green power from specific projects to meet the demand of the consumer,and the selling company does not differentiate the source of green power sold to consumers as long as the total amount of sold green power does not ex

241、ceed the purchased amount.4.Purchase independent or unbundled EACs:Companies can purchase EACs within the same electricity market as the generation company.5.Passive consumption:If the EACs are not traded before it is cancelled,consumers could claim a consumption of an equivalent amount of green pow

242、er if a supply agreement is signed with the seller,company could claim a consumption of green power when renewable energy accounts for more than 95%of the total grid-connected electricity.Chinas green power trading with“Bundled”GECs under the New Policy addresses concerns raised by RE100.RE100 is a

243、global corporate renewable energy initiative launched in 2014 through a collaboration between international climate organization and the Carbon Disclosure Project(CDP).As of April 2023,over 400 members worldwide have participated in the initiative.Its recognition criteria for green power and EACs ar

244、e widely applied and referenced by global businesses(refer to Table 4.1).Table 4.1：RE100 Recognition criteria for green power*Source:EY research and analysis,RE100 websiteRE100 recognizes the right to claim environmental attributes through EACs or agreement.The specific recognition criteria for the

245、right to claim ownership are shown in Table 4.2:CriteriaComparative ContentCredible dataReliable measurement is required for key information such as generation type,project location,generation time and generation quantity.AttributeaggregationEnvironmental attribute declaration must include all socia

246、l and environmental rights associated with the consumption of green power.Exclusiveownership of attributesEnvironmental attributes must possess legal validity and be protected by law.The entire process,from issuance to trading and verification,should be traceable.Exclusiveclaims on attributesEnviron

247、mental attributes must not be subject to double counting,nor should they be declared multiple times.Geographic market limitations of claimsEnvironmental attributes must be in the same market as the corresponding electricity.Vintage limitation of claimsThe period of declarations should reasonably ali

248、gn with the time of generation.Currently,there are no specific temporal requirements,it is recommended that EACs declaration fall within a window period of 21 months,starting no earlier than six months prior to the relevant year and ending no later than three months after the relevant year.Table 4.2

249、:Recognition criteria for declaration rights in RE100Green power trading：Accelerating green power consumption404.2 Increasing international recognition of the GEC scheme(continued)Source:EY research and analysis,RE100SR.NO.CriteriaAlignment1Credible generationdataMeets the requirements2Attribute agg

250、regationMeets the requirements,with a condition3Exclusive ownership(no double counting)of attributes Meets the requirements4Exclusiveclaims(no double claiming)on attributesMeets the requirements,with a condition5Geographic market limitations of claimsMeets the requirements6Vintage limitationsof clai

251、msMeets the requirement,but have a recommendationTable 4.3:RE100s evaluation results on GEC in 2020To meet the RE 100 criteria,GEC users are required to redeem all instruments e.g.,GHG offset and any other certificate(if issued to the same RE generation).Recommendation:GECs will convey the date of g

252、eneration(but no expiry date of thecertificate).To make a credible RE claims,users of GEC should check the vintage of the certificates which should be reasonably close to the reporting year of the electricity consumption to which it is applied.RE100 proposes that companies adopt GEC for declaring en

253、vironmental attributes and emphasizes the importance of exclusivity of environmental attributes.It is recommended to consider the timeliness of the declaration.According to the technical assessment report on GECs released by RE100 in August 2020:1.Special attention should be given to the exclusivity

254、 of environmental attributes.If a project possesses multiple environmental attribute,all certificates need to be canceled at the time of declaration;2.It is suggested that GECs used for environmental attribute declarations should have a validity period of 21 months,starting no earlier than six month

255、s prior to the current year and ending no later than three months after the current year.Source:RE100 website,Climate Group,CDP|green electricity certificate(GECs)of China-Technical Assessment Report|August 2020Green power trading：Accelerating green power consumption414.2 Increasing international re

256、cognition of the GEC scheme(continued)Concerns of double counting raised by I-REC:The I-RECs assessment report issued in August 2020 regarding the Chinese electricity market stated that,“Currently,wind and solar projects that have already applied for CCER can still apply for GEC,posing a risk of dou

257、ble counting.Concern toward double counting:“Some wind power and solar PV projects are developed as CCER projects to claim carbon credits and obtain additional revenues.Meanwhile,they can also apply for GEC,which may cause double-counting.Although NDRC temporarily suspended to issue CCER in March 20

258、17,there might be a double-counting risk if CCER is re-opened and used to offset the carbon allowance in the national ETS.”Green power trading and the GEC scheme guided by the New Policy addresses concerns raised by RE100 and I-REC.It should be noted that concerns associated with double counting env

259、ironmental attribute claims raised by RE100 also apply for I-REC projects in China,as I-RECs have been issued to renewable energy projects in China that do not meet RE100s guidelines.The New Policy issued in August 2023,solidifies the exclusive status of GEC for claiming environmental attributes.Mor

260、eover,“bundled”green power consumption further enhance the credibility of renewable energy usage claims:GECs serve as the sole proof of green power consumption and environmental attribute claims.GECs cannot be simultaneously applied for with other certificates of the same attributes in the electrici

261、ty sector.The draft of the Management Measures of Voluntary Greenhouse Gas Emission Reduction Trading(Trial)in June 2023 also states that projects applying for CCER must be unique,i.e.,they cannot participate in other emission reduction trading mechanisms and cannot have duplicate recognition or emi

262、ssion reduction calculation.The New Policy requires that“certification bodies carry out certification of green power consumption based on GECs issued within the past two years,starting from the month of electricity production(inclusive),and certification information should be promptly synchronized w

263、ith the issuing authorities”.This fully addresses the concerns of RE100 regarding the double counting of GEC with CCER and the vintage limitation of GEC.Green power trading with“bundled”GECs further strengthens the credibility of the China GEC scheme.Green power trading：Accelerating green power cons

264、umption42Recognized green powerRequirement for Scope 2 emissions calculationRenewable energy and specific clean energy sources include:wind,water,solar,geothermal energy,and biofuels.1.Directly sign PPAs with generators and establish agreements on the attribution of environmental benefits2.EACs shou

265、ld have uniqueness and traceability3.The use of green power and GECs should avoid potential risk of double counting with emission factors4.2 Increasing international recognition of the GEC scheme(continued)Although the effectiveness of reducing emissions through green power trading is recognized,con

266、cerns remain regarding the risk of double counting environmental attributes when included in both the electricity emissions factor and in certificates used to make a claim in a carbon account.The CBAM regulation has been designed by the EU to address the potential issue of“Carbon Leakage”.Carbon lea

267、kage refers to the situation that may occur if,for reasons of costs related to climate policies,businesses were to transfer production to other countries with laxer emission constraints.The transition period for CBAM is from 1 October 2023,to then end of 2025,during which reporting obligations are r

268、equired for declared entities.In 2026,the EU will formally impose a“Carbon Tax”.Table 4.4：The green power recognized by the GHG ProtocolGHG Protocol and Carbon Border Adjustment Mechanism(CBAM)The GHG Protocol was jointly established by the World Resources Institute(WRI)and the World Business Counci

269、l for Sustainable Development(WBCSD)in 1998,and provides guidance for companies to publicly report and participate the voluntary or mandatory GHG projects,as well as enter the GHG market.It also helps companies identify and prioritize emission sources,leading to a reduction in corporate-level emissi

270、ons.IssueCovered Product TypesCementFertilizerIron/SteelAluminumHydrogenElectricityGHG coveredCO2CO2(plus nitrous oxide for some fertilizers goods)CO2CO2(plus perfluorocarbons for some aluminum goods)CO2CO2Emissioncoverage(transitionalperiod)Direct and indirectdirectEmissioncoverage(definitive perio

271、d)Direct and indirectdirect,subject to reviewdirectTable 4.5：List of products covered by CBAMSource:EY research and analysis,GHG Protocol and CDPCBAM applies to high carbon-emitting industries,including cement,steel,aluminum,fertilizer,electricity,and hydrogen,ultimately covering over 50%of the emis

272、sions sectors.Details are shown in table 4.5.Green power trading：Accelerating green power consumption434.2 Increasing international recognition of the GEC scheme(continued)The European Union will develop a methodology for calculating Scope 2 emissions for CBAM before the end of the transitional peri

273、od.The EU has indicated a potential adherence to the principle of excluding double counting as recommended by GHG Protocol.Indirect emissions during the transitional period of CBAM:The Commission shall adopt,no later than 30 June 2025,an implementing act pursuant to Article 7(7)to further specify wh

274、ich of the calculation methods determined in accordance with the first subparagraph shall apply to the calculation of default values.In China,for green power consumption to be considered in carbon accounting,associated market-based electricity consumption profiles and emission factors need to be pub

275、lished to resolve the issue of double counting.The New Policy have explicitly called for research to promote the coordination between GECs and the carbon market,as well as CCER mechanisms.This aims to ensure concerted and coherent market mechanisms,with emission factor calculation principles expecte

276、d to be released in due course.Green power trading：Accelerating green power consumption44Recent improvements in regulations and the market mechanism have adequately addressed the concerns and doubts of international institutions.Exclusivity of claims:GECs serve as the sole proof of green power consu

277、mption and certification of environmental attributes.The corresponding electricity volume of GECs should not be claimed by any other certificates with the same attributes.The Management Measures for Voluntary Greenhouse Gas Emissions Trading(Trial)(Draft for Comments)released in July 2023 also state

278、s that projects applying for CCER must demonstrate uniqueness,which means they cannot participate in other emission reduction trading schemes.Vantage of green power consumption claims:The New Policy on GECs requires that certification bodies conduct green power consumption certificate based on GECs

279、within two years from the electricity production(inclusive),and the certification information should be promptly synchronized to the issuing authority“.4.2 Increasing international recognition of the GEC scheme(continued)Green power trading：Accelerating green power consumption45Increase in GEC suppl

280、y and demand for green power consumption will help to stimulate green power trading.According to the New Policy,the scope of projects eligible for GECs includes all renewable energy projects such as wind power,solar PV and geothermal energy.This will in turn increase GEC supply.The New Policy also a

281、ims to boost demand by encouraging SOEs,government agencies,and public institutions to take the lead in green power trading as a responsible public entity.“Strengthening the green power consumption responsibility”will become an important target for those entities.Support for foreign enterprises to p

282、articipate in the Chinese GEC and green power trading schemes are also to be expected.In July 2023,the Opinions of the State Council on Further Optimizing the Foreign Investment Environment and Increasing Attraction of Foreign Investment issued by the State Council highlighted the importance of intr

283、oducing policies and measures to promote green power consumption,supporting foreign-invested enterprises to participate more in GEC trading and cross-provincial or cross-regional green power trading.4.3 Further GEC and green power trading stimulation expectedAuthority and credibility of the GEC sche

284、me to be further enhanced.The New Policy stipulated that“GECs serve as the sole proof of green power consumption and certification of green energy attributes”.The New Policy also states the need to“establish certification standards,systems,and identification systems for green power consumption based

285、 on GECs“.The trading organizations will then trade the GECs bundled with physical electricity based on the transaction contracts or bilateral agreements,with the transaction contracts clearly indicating the trading volume and price of both the GECs and the physical electricity.It is expected that a

286、ll green power trading will achieve bundling of certificates.The New Policy clarifies that GECs are an essential part of green power trading,where users purchasing green power will receive the corresponding GECs.Green power trading includes both the exchange of green power and the corresponding gree

287、n energy attributes.5Recommendations for corporate power consumersGreen power trading：Accelerating green power consumption47The electricity market and the carbon market are intertwined with electricity prices and carbon prices closely interconnected.The carbon market and the electricity market share

288、 common market participants,and the overall construction of a nationally unified market aligns with the goal of promoting clean energy development and facilitating efficient allocation of resources.At the same time,there are differences between the two markets in terms of market elements and trading

289、 mechanisms.Chinas green power market is steadily advancing,and in order to better utilize market mechanisms to promote the development of renewable energy,the development and coordination of the two markets should be considered from the aspects of policy coordination and market integration.In parti

290、cular,focus should be given to removing barriers between electricity and carbon markets,enhance integration of the two markets while refining mechanisms to avoid double counting of green energy attributes.In April 2023,Beijing issued a notice on the pilot work of managing carbon trading in the city

291、for 2023,stating that the emissions from green power used by key carbon-emitting units through market-based means are calculated as zero.In June of the same year,Shanghai issued a notice on adjusting the calculation method of carbon emissions from green power in the external purchase of electricity

292、by carbon trading enterprises in the city,adjusting the emission factor of purchased green power to zero.Beijing and Shanghai have both clarified the carbon emissions of green power,further promoting the synergy between electricity and carbon,and it is expected that these two markets will further co

293、ordinate nationwide in the future.5.1 Stay updated with electricity and carbon market developmentsDifferenceMutual influenceCarbon marketElectricity marketCarbon priceCarbon emission targetsElectricity consumption behaviorCommon CharacteristicsThe development of the two markets should be coordinated

294、,promoting their synergistic growth and mutual advancement.1.Policy-driven market2.The spatial requirements of the carbon market need to gradually shrink1.Demand-driven market2.The spatial requirements of the electricity market need to expand graduallyFigure 5.1:The Relationship between the Carbon M

295、arket and the Electricity MarketElectricity priceSupply and demandDifferenceGreen power trading：Accelerating green power consumption48Emission factors:The connection between electrical energy and Scope 2 emissionsCurrently,there are two methods for calculating emissions of purchased electricity:1.By

296、 directly deducting the EAC bundled electricity from the total purchased electricity,i.e.,The emissions from renewable energy electricity are zero.Actual emissions from purchased electricity=(Total purchased electricity EAC bundled electricity)x emission factor2.The environmental attributes of EACs

297、are not considered as zero,but rather as a emission reduction equivalent to that of fossil fuel-generated electricity.These are deducted from the total emissions.Actual emissions from purchased electricity=Total purchased electricity x emission factor-Emission reduction represented by EACsThe most w

298、idely used emission factor in China is the national emission factor,calculated as the total emissions of the power industry divided by the total electricity consumption in society.Regardless of the method used,when calculating the total emissions of purchased electricity using the national emission

299、factor,the double counting issue arises when the environmental attributes of GECs are separately deducted again.As the power sector accelerates its low-carbon transformation,the emission factor of purchased electricity theoretically decreases with this transition.However,due to the absence of a link

300、age between two systems,it is unclear whether the emission reductions from offset carbon have been reflected in Scope 2 emissions.Previously,Chinas emission factor has long been criticized for the untimely updating.With the approach of the 2030 carbon peaking target,various policies and mechanisms a

301、re being accelerated for improvement.The updating and calculation of emission factors need to be more scientifically conducted.According to expert interviews and surveys,emission factors is expected to be continuously updated and become more scientific.In March 2022,the Ministry of Ecology and Envir

302、onment(MEE)adjusted the national emission factor to 0.5810 tCO2/MWh,which is the first official update since the factor was announced in 2017.In February 2023,the ministry further specify the factor for 2022 to be 0.5703 tCO2/MWh.It also clarified that the annual national average emission factor(if

303、updated)will be released at the end of each year.The successive updates of the national emission factor by the MEE in 2022 and 2023 indicate an important step forward in Chinas emission factor reform.5.1 Stay updated with electricity and carbon market developments(continued)Green power trading：Accel

304、erating green power consumption495.2 Take action:Strategize,design,and executeStrategize emission reduction goals and targetsWhat are the companys emissions?What are the emission reduction solutions that fit the companys characteristics?How much green power does the company need?What is the going on

305、 in the market?How to proceed with procurement?Comprehensive emissions footprint audit Precise identification of emission sources Reasonable emission reduction planning Quantitative analysis of emission reduction effects Feasibility study of green power tradingWhat resources are needed to implement

306、theplans?Is there sufficient capability to support?Comparison of various approaches emission reduction?Is it better to own renewable assets or to directly procure green power?What are the risks of green power trading and how to mitigate them?Clear and quantifiable planning and comparison of options

307、Reasonable resource allocation Internal capacity assessment and enhancement Implementation path Analysis of risks and mitigation measuresDesign scientific and realistic implementation plans Ensure effective execution What are the implementation methods?How to implement quickly and efficiently?How to

308、 solve problems encountered during the implementation process?How to make external statements and promote it?Progressive implementation Efficient tracking and supervision Agile market response speed Deep market understanding Effective methods of statement and promotionFigure 5.2:Companies action pla

309、nCompanies need to coordinate the development of emission reduction pathways,strategic planning,and scientifically sound implementation plans.These plans should outline the implementation paths and be complemented by effective execution measures.By doing so,companies can unlock the potential of gree

310、n power trading to assist in achieving targets in a cost-effective manner,while creating value in the long term.Green power trading is an effective option for companies to reduce emissions.Companies are suggested to plan ahead,coordinate and integrate green power trading with overall emission manage

311、ment strategy based on their actual situation.For specific planning details,please refer to Figure 5.2.ConsiderationsActionsGreen power trading：Accelerating green power consumptionEY Greater China50Sam ShiaoPartner,Strategy and Transactions Ernst&Young(China)Advisory LAlex ZhuGreater China Decarboni

312、zation Taskforce LeaderGreater China Energy&Infrastructure Managing PartnerErnst&Young(China)Advisory LAlex LuPartner,Greater China Energy&Resources Market LeadEY Hua Ming LLP(Special General Partnership)Simon ZhengSenior Manager,Strategy and TransactionsErnst&Young(China)Advisory LAntonio JiaSenior

313、 Consultant,Strategy and Transactions Ernst&Young(China)Advisory LConnie HaoSenior Consultant,Strategy and TransactionsErnst&Young(China)Advisory LJoye LiSenior Consultant,Strategy and TransactionsErnst&Young(China)Advisory L a better working worldEY exists to build a better working world,helping to

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