Development and Reform Commissions, Energy Bureaus of all cities, State Grid Shandong Electric Power Company, Shandong Electric Power Trading Center, Shandong Energy Group Co., Ltd., Huaneng Shandong Power Generation Co., Ltd., Huadian International Power Co., Ltd. Shandong Branch, National Energy Group Shandong Electric Power Co., Ltd., Datang Shandong Power Generation Co., Ltd., State Power Investment Corporation Shandong Branch, China Resources Power Holdings Co., Ltd. North China Region, China Three Gorges Corporation Shandong Branch, Shandong Nuclear Power Co., Ltd.:
To promote the high-quality development of new energy, in accordance with the provisions of the National Development and Reform Commission and the National Energy Administration such as the "Notice on Deepening the Market-oriented Reform of New Energy On-grid Tariffs to Promote the High-quality Development of New Energy" (Fagai Price [2025] No. 136) and the "Notice on Establishing and Improving the Price Mechanism of the Power Auxiliary Service Market" (Fagai Price [2024] No. 196), the Provincial Development and Reform Commission, Shandong Energy Regulatory Office, and Provincial Energy Bureau have studied and formulated the "Implementation Plan for the Market-oriented Reform of New Energy On-grid Tariffs in Shandong Province", which is now issued to you. Please earnestly implement it.
Shandong Provincial Development and Reform Commission
State Energy Administration Shandong Regulatory Office
Shandong Provincial Energy Bureau
July 31, 2025
Implementation Plan for the Market-oriented Reform of New Energy On-grid Tariffs in Shandong Province
In order to thoroughly implement the decisions and arrangements of the Party Central Committee and the State Council on accelerating the construction of a new power system and improving the mechanism for high-quality green and low-carbon development, and earnestly implement the work requirements of the Provincial Party Committee and the Provincial Government on accelerating the planning and construction of a new energy system and making every effort to build a demonstration zone for the green and low-carbon transformation of energy, in accordance with the provisions of the National Development and Reform Commission and the National Energy Administration such as the "Notice on Deepening the Market-oriented Reform of New Energy On-grid Tariffs to Promote the High-quality Development of New Energy" (Fagai Price [2025] No. 136) and the "Notice on Establishing and Improving the Price Mechanism of the Power Auxiliary Service Market" (Fagai Price [2024] No. 196), and in combination with the actual situation in Shandong, the following implementation plan is formulated.
I. Establish and Improve a Price Mechanism Adapted to the High-quality Development of New Energy
(1) Promote the formation of all new energy on-grid tariffs through the market. In principle, all on-grid electricity of new energy projects (wind power, solar power generation, the same below) in the province shall enter the electricity market, and the on-grid tariff shall be formed through market transactions. According to the construction of the electricity market and the development of the industry, biomass power generation and other new energy sources will be promoted to participate in market transactions in a timely manner.
For new energy electricity participating in cross-provincial and inter-regional transactions, the on-grid tariff and transaction mechanism shall be implemented in accordance with the relevant national policies on cross-provincial and inter-regional power transmission. The electricity that fails to be connected to the grid due to factors such as quotation after new energy participates in the market shall not be included in the statistics and assessment of new energy utilization rate. For projects enjoying financial subsidies, the subsidy standard within the reasonable utilization hours of the whole life cycle shall be implemented in accordance with the original provisions.
(2) Establish a price settlement mechanism for the sustainable development of new energy. After new energy projects participate in electricity market transactions, a differential settlement mechanism shall be established simultaneously outside the market. For the electricity included in the mechanism, if the average market transaction price is lower or higher than the mechanism price, the power grid enterprise shall carry out differential settlement, and the differential cost shall be included in the system operation cost and shared (or enjoyed) by all users. For new energy projects that have been included in the mechanism, they may voluntarily apply to withdraw during the implementation period. When the implementation of a new energy project expires or it voluntarily withdraws within the period, it shall no longer be included in the scope of the mechanism.
After all electricity of existing new energy projects put into operation before June 1, 2025 participates in market transactions, the mechanism price level shall be implemented in accordance with the upper limit of national policies, which is uniformly specified as 0.3949 yuan per kilowatt-hour (including tax). In principle, the upper limit of the mechanism electricity for a single project shall be connected with the current policies on the scale of electricity with guarantee nature, and the implementation period shall be the earlier of the remaining hours of the reasonable utilization hours of the whole life cycle and 20 years after put into operation.
(3) Establish a price competition mechanism for the sustainable development of new energy. For incremental new energy projects put into operation from June 1, 2025, the Provincial Development and Reform Commission, together with relevant units, shall clarify the scale of mechanism electricity and the implementation period, and determine the mechanism price level through price competition. When organizing bidding, the lower limit of declaration sufficiency and the upper and lower limits of bidding shall be set to guide new energy enterprises to fully compete and reduce the energy cost of the whole society; the selected projects shall be determined in ascending order of declared prices, and the mechanism price shall, in principle, be determined according to the highest quotation of the selected projects. The bidding work shall be voluntarily participated by new energy projects, and those participating in the bidding shall issue a performance bond in accordance with the regulations. Household distributed photovoltaic projects are supported to participate in bidding independently or by entrusting agents. At this stage, distributed photovoltaic agents shall have the qualification of electricity sales companies.
The 2025 bidding work shall, in principle, be organized in August, with the bidding declaration sufficiency not less than 125%. From 2026 onwards, the bidding work shall, in principle, be organized in October of the previous year, and the declaration sufficiency shall be appropriately optimized and adjusted according to the development status of new energy. All localities shall not take the allocation of energy storage as a precondition for the approval, grid connection, and grid access of new projects.
(4) Improve the green electricity and green certificate trading mechanism. The electricity included in the mechanism is guaranteed by the mechanism price, and the corresponding electricity shall no longer participate in green electricity trading and shall not obtain green certificate benefits repeatedly. Improve the green electricity trading policy, and the market declaration and transaction price shall clearly specify the electricity energy price and the corresponding green electricity certificate price respectively. The green certificate income of green electricity trading electricity shall be determined according to the principle of taking the minimum of the monthly green electricity contract electricity, the remaining on-grid electricity after deducting the mechanism electricity, and the electricity consumption of power users. In the province's green electricity trading, centralized bidding and rolling matching trading shall not be organized separately.
II. Establish and Improve a Market Trading Mechanism Adapted to the High-quality Development of New Energy
(1) Improve the medium and long-term market trading and price mechanism. Promote the effective connection between the medium and long-term market price and the primary energy cost and spot market price. In medium and long-term transactions, both parties to the transaction shall reasonably determine the quantity and price of medium and long-term contracts, settlement reference points and other information in combination with actual needs. The settlement reference point can be independently selected as any node in the real-time market (or day-ahead market) or a unified settlement point. At this stage, the mechanism electricity shall no longer carry out other forms of differential settlement, and the power grid enterprise may sign a medium and long-term contract for mechanism electricity with the new energy station on behalf of all users. The contract price shall be clearly defined as the reference settlement price of the contract, and the relevant electricity shall be simultaneously included in the user-side signing ratio. The upper limit of the declared electricity in medium and long-term transactions shall, at this stage, be determined according to the on-grid capacity after deducting the capacity corresponding to the mechanism electricity from the rated capacity.
(2) Improve the spot market trading and price mechanism. New energy projects may report the quantity and price to participate in spot transactions, or accept the price formed by the market. All electricity in the spot market shall be settled at the spot market price, and the electricity in medium and long-term contracts shall be settled according to the difference between the medium and long-term contract price and the spot price of the medium and long-term settlement reference point. Distributed new energy is supported to participate in spot transactions directly or through aggregation. Considering factors such as system peak shaving demand, regulation resource cost, and new energy consumption, the new energy consumption cost shall, in principle, not be higher than the new energy on-grid tariff. Appropriately relax the spot market price limit and timely adjust the upper limit of generator startup costs.
New energy projects shall fully participate in the day-ahead reliability unit combination and real-time market. New energy projects and users may voluntarily participate in the day-ahead market. When the day-ahead market is not carried out, the day-ahead pre-clearing results shall not be used as the settlement basis (only disclosed to the operating entities). Users are supported to report the quantity and price to participate in the day-ahead market. For those that do not have the conditions temporarily, users are allowed to independently decide to declare the purchase quantity within the range not exceeding the maximum power consumption, and no deviation income recovery shall be carried out.
(3) Improve the auxiliary service market trading and price mechanism. Scientifically determine the demand of the auxiliary service market, adhere to payment according to effect, reasonably set market rules such as paid auxiliary service varieties and auxiliary service pricing, and promote the reasonable formation of auxiliary service prices. On the basis of the current frequency modulation and ramping auxiliary service transactions, standby auxiliary service transactions shall be carried out in a timely manner. The standby auxiliary service market, the ramping auxiliary service market, and the spot electricity energy market shall be cleared jointly. The frequency modulation auxiliary service fee shall be shared by the user's electricity consumption and the on-grid electricity that does not participate in the electricity energy market transaction. Improve the implementation rules for the grid-connected operation management of power plants adapted to the full electricity of new energy entering the market, strengthen the assessment of the grid-connected operation management of new energy stations, and the assessment fees for the accuracy of new energy forecasting shall be shared by all users.
(4) Optimize the generation-side capacity compensation mechanism. According to the total demand of Shandong power grid's electricity load (including standby capacity), compensation shall be given to the effective capacity of various market-oriented units. The capacity compensation standard shall be determined according to the principle of recovering the fixed cost of the long-term marginal unit in the whole network, and the capacity supply and demand coefficient shall be set according to the total capacity demand and total effective capacity of the system. The capacity electricity fee of the generating unit shall be determined by the product of the effective capacity that the unit can provide, the capacity compensation price standard, and the annual capacity supply and demand coefficient.
(5) Standardize the cost compensation mechanism of the electricity market. Clarify the cost compensation principles for units that must be started for system security reasons, units that must be started for their own reasons (such as those operating according to self-scheduling curves for heating needs, etc.), and non-must-start units by type. The cost compensation fee shall be settled on a daily and monthly basis, and shall be determined according to the difference between the sum of the unit's daily startup cost, no-load cost, and electricity energy marginal cost and the market income (no compensation shall be made when the difference is negative). The unit cost compensation fee shall be borne by the user-side electricity consumption, the on-grid electricity that does not participate in the electricity energy market transaction, and the on-grid electricity that does not execute according to the real-time clearing results.
III. Establish and Improve a Risk Prevention and Control Mechanism Adapted to the High-quality Development of New Energy
(1) Improve the electricity market information disclosure mechanism. Establish and improve an electricity market information disclosure system covering "the whole market, all varieties, the whole cycle, and all subjects", covering medium and long-term, spot, auxiliary services, retail and other markets, transaction varieties such as electricity energy, green electricity and green certificate transactions, time dimensions such as year, quarter, month, week, and day, and subjects such as power generation, electricity consumption, electricity sales, new business entities, power grid enterprises, and market operating institutions.
(2) Improve the electricity market price monitoring system. Improve the price monitoring system covering multiple dimensions and indicators of power generation enterprises, electricity sales companies, and power users. Strengthen the monitoring of price information such as relevant transaction conditions, settlement items, various cost scales, profit and cost sharing of various subjects, and market price limits in the medium and long-term, spot, and auxiliary service markets. When abnormal price fluctuations occur in the electricity market, timely start early warning, analyze the causes of abnormalities, and study disposal plans to ensure the smooth and orderly progress of electricity price reform.
(3) Establish a generator set cost investigation system. According to the energy structure characteristics of Shandong power grid, formulate cost models, investigation systems, and accounting rules for all market-oriented units involving coal-fired, gas-fired, new energy, etc. Regularly carry out investigations on the startup cost, variable cost, and fixed cost of different types of units. Measure the cost levels and fluctuation trends of startup costs, no-load costs, and electricity energy marginal costs of various types of units, and establish a unit cost curve declaration mechanism to support the stable operation of Shandong electricity market and the continuous optimization of the electricity price mechanism.
(4) Improve the price supervision mechanism of the electricity retail market. The electricity trading platform shall provide users with a standardized retail package price comparison function based on the actual electricity consumption curve. All retail packages shall set a capped settlement price clause for users to choose independently. The capped price of retail packages shall be comprehensively calculated according to factors such as the time-sharing reference price of the retail market, the floating coefficient, and the shared expenses of electricity sales companies' market operation. The time-sharing reference price of the retail market shall be calculated and released on a natural monthly basis. The Provincial Development and Reform Commission shall, according to the level of the purchase and sale price difference of electricity sales companies, timely announce the ranking to improve market transparency and protect the right to know and choose of retail users.
IV. Safeguard Measures
The Provincial Development and Reform Commission, together with the Shandong Energy Regulatory Office and the Provincial Energy Bureau, shall formulate supporting implementation rules in accordance with this implementation plan, clarify the time node for all electricity of new energy to enter the market, and promote the orderly development of various works. State Grid Shandong Electric Power Company shall build a bidding platform and cooperate in the bidding work of incremental new energy projects; add the item "differential settlement fee of new energy sustainable development price settlement mechanism" to the system operation fee, announce the average market transaction price of different types of new energy projects on a monthly basis, and timely carry out the settlement work of mechanism electricity fees; optimize the proxy purchase mode of guaranteed electricity for residents, agriculture, etc. When there is a surplus or shortage after matching the priority power generation with the guaranteed electricity, the differential electricity shall be traded in a market-oriented way first. All units shall, according to their functions, strengthen communication with various market entities, fully use portals, collective forums, and other methods to organize policy publicity and interpretation, and actively answer policy questions concerned by market entities to form a reform consensus.