China has published a draft revision of its Renewable Energy Law that would end the guarantee that grid companies buy all the electricity produced by eligible wind and solar projects. Instead, renewable power would increasingly be sold and priced through the market, while electricity users would face minimum renewable consumption targets backed by fines, TaiyangNews reported.
The draft went to its first reading at the 25th session of the Standing Committee of the 14th National People's Congress (NPC) in early November and was published for public consultation on the NPC website on 10 November for 30 days. According to Xinhua, as reported by CGTN, the revised text has 10 chapters and 76 articles.
From guaranteed purchase to market prices
The current law requires grid companies to purchase "the full amount of renewable electricity generated by eligible projects within their grid coverage". The draft removes that provision. For renewable power sold in market transactions, both volume and on-grid price would be set through those transactions, while electricity that is not traded would still be priced under national pricing policies.
To protect investment, the draft proposes a price settlement mechanism designed to give developers reasonable returns, and calls for better pricing of ancillary services and capacity. It builds on the contract-for-difference style pricing mechanism that China introduced in 2025.
The market has already moved a long way. Xinhua said more than half of China's new energy electricity is now priced through the market, and that market-traded electricity reached 5,853.6 billion kWh between January and September 2026, up 18.9% year on year.
Consumption targets with penalties
The draft sets minimum renewable consumption targets and provincial consumption obligations, combining mandatory and voluntary elements. Companies could meet them by generating their own power, through direct green electricity connections, by buying green power or by trading Green Electricity Certificates (GECs).
Under Article 70, entities that fall short could be fined five to ten times the GEC cost of the shortfall, calculated from the average certificate price in the month before the compliance deadline. Violations would also be entered into credit records. GECs would be linked to carbon emissions accounting, product carbon footprints and carbon market management.
Grid access, storage and recycling
The draft calls for a unified national electricity market with fair, non-discriminatory grid access, and would require grid companies to disclose information on grid connections and transmission capacity. It supports new energy storage, vehicle-to-grid and flexible demand. Provincial energy authorities would have to assess how much distributed solar their grids can host, and wind and solar plants past their design life could keep running if an assessment finds they meet the required conditions.
Article 57 sets out a recycling framework for retired wind and solar equipment. The draft also introduces monitoring and early warning for renewable supply chain security, and says China may take corresponding measures against countries or regions that impose discriminatory restrictions on its renewable energy industry.
The revision is intended to support China's target of 3.6 TW of wind and solar capacity by 2035.
What it means for developers and buyers
In China, project revenue would depend more on market prices and the new settlement mechanism and less on guaranteed grid purchase, which raises the value of storage and flexible output. Large power users would face firmer green consumption obligations, which could lift demand for certificates and direct green supply. For governments and manufacturers abroad, the clause on discriminatory restrictions signals that trade measures against Chinese renewable products could meet a legal response.
Source: TaiyangNews, CGTN/Xinhua
