(Yicai) Feb. 10 -- China has issued new measures to promote the full integration of wind and solar power into the electricity market after the country's new energy power generation capacity exceeded that of coal-fired plants.

The grid-connected electricity prices will be determined through competitive market mechanisms, according to a notice released by the National Development and Reform Commission, which oversees economic planning, and the National Energy Administration yesterday.

Due to the randomness, volatility, and intermittency of new energy generation, a differential pricing mechanism will be applied to the electricity volume, a NDRC official said. If the market transaction price is lower than the mechanism's set price, the electricity generator will receive compensation,  and if it is higher, the generator needs to return the excess, the person added.

This approach aims to provide companies with reasonable and stable price expectations, fostering the industry's steady and healthy development and contributing to achieving China's dual carbon goal, the official pointed out.

Existing projects operational before June 1 will adopt the differential settlement mechanism, while newly added projects from that date onward will have their mechanism-based electricity prices determined through competitive bidding on the local market, the notice showed.

Regarding the impact on end-user electricity prices, there would be no effect on the rates of residential and agricultural users, the official pointed out. For commercial and industrial users, it is statically estimated that during the first year of implementation, the average electricity price across China will remain mostly unchanged from the year before, the person said.

In regions with ample power supply and relatively low new energy market prices, slight reductions might occur, the official noted, adding that commercial and industrial user electricity prices will subsequently fluctuate according to power supply and demand conditions as well as the development of new energies.

China's new energy power generation capacity reached around 1.41 billion kilowatts as of the end of last year, accounting for more than 40 percent of its total installed capacity, surpassing coal-fired power installations, according to data by the NEA. 

This year's additional power generation capacity could exceed 450 million kW, with over 300 million kW coming from new energy sources, the China Electricity Council said in a report. 

Editor: Martin Kadiev