What does NDRC & Nea's energy reform mean for investors?

The reform aims to enhance competition but raises uncertainty over future returns for investors. China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) have issued a directive to accelerate market-based pricing for renewable energy, including wind and solar power.

What does NDRC stand for?

On February 9, 2025, China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly issued the Notice on Deepening the Market-Oriented Reform of New Energy On-Grid Electricity Prices to Promote High-Quality Development of New Energy (hereafter referred to as the Notice).

What does China's new energy on-grid electricity reform mean for China?

The reform of new energy on-grid electricity prices marks a significant milestone, with approximately 80% of China’s installed capacity and 80% of its power generation now subject to market-based pricing. This transition signals a new stage of high-quality development for China's modern power system.

Should new energy on-grid electricity pricing be deepened?

From a long-term perspective, deepening the marketization of new energy on-grid electricity pricing will not only inject market vitality into the high-quality development of the new energy sector but also provide institutional guarantees for the construction of a new power system.

What is on-grid energy policy?

This policy promotes the full market-based determination of on-grid electricity prices for new energy sources, including ground-mounted and distributed PV projects, as well as onshore and offshore wind power.

Will NDRC reform affect electricity prices?

While the reform introduces market-oriented pricing, the NDRC emphasized that the policy will not affect residential and agricultural electricity prices. Industrial and commercial users can also expect minimal changes in the first year, helping to ensure that the transition does not disrupt broader economic stability.