Recently, the National Development and Reform Commission of China （NDRC） issued the “Notice on Signing Mid- and Long-Term Electricity Contracts in 2020″：considering the risk tolerance of various market entities to the price, it is necessary to encourage them to sign a higher proportion of medium- and long-term contracts and to investigate ways to recover fixed cost for power generation so as to promote the interactions between medium and long-term and spot transaction prices.
NDRC point out that to promote the market-oriented trading of electricity, it requires related competent authorities to attach great importance to the mid- and long-term power contract signing in 2020, and to identify the contract details and complete the signing work as soon as possible by the end of 2019 or early 2020.
Notice further stresses that it encourages those inter-regional preferred power sources including large hydropower, large nuclear power, high-efficiency clean coal power to be inked in the long-term contracts for 5 years or more. They should fully draw on a flexible and floating price mechanism to rationalize and open the price marketization of electricity industry as well as its upstream and downstream industries.
