China Publishes Draft Reforms to Renewable Energy Spot Markets

China has proposed a significant update to its electricity spot market rules that would allow solar and wind farms to trade power alongside their co-located battery systems, a change that could reshape how renewable energy is priced and dispatched across the country’s national grid.

The draft that was published by the National Development & Reform Commission on October 19 draws public submissions through November 18, and is scheduled to come into force on January 1, 2027, where it would remain in effect for five years.

At the center of the proposal is a provision that lets generators pair with batteries they host on the same site and enter the market as one unit. Until now the two have generally traded as separate entities. The revised approach would allow a solar or wind operator to bundle its power output projections and storage dispatch plans into one submission rather than managing both independently.

Operators stand to gain meaningful control over when their electricity reaches the grid, and the timing advantage compounds at scale.

Those submitting joint bids would be able to time their deliveries to coincide with stronger pricing windows, subject to technical and market constraints. Storage could also bridge the difference between projected and real-world output, reducing the financial penalties that arise when renewable plants miss their targets.

Joint bidding of this kind is not an entirely new concept within China, having already been tested in provinces including Shandong. The NDRC also signaled its backing for the mechanism in 2025, though without the national reach the current draft would provide.

Embedding the arrangement in rules for the unified electricity market gives it a legal foundation and geographic scope that no provincial experiment could match.

Beyond the renewable-storage pairing, the draft widens the category of recognized market participants to include smart microgrids, load aggregators, new forms of grid-scale storage and virtual power plants, directing all of them to engage more actively with real-time price signals.

The proposed framework spans real-time, day-ahead and intraday trading, with real-time sessions setting dispatch in windows as short as five minutes. Locational marginal pricing is set as the standard clearing method, designed to fold grid congestion and supply conditions into one market-clearing number.

Several operational details are left deliberately open in the national draft for lower tiers of government to fill in. Settlement calculations, battery charging protocols, metering requirements and bidding formats for combined renewable-storage operations are all left to lower tiers of government to specify through their own implementation rules.

That gap may slow uniform adoption even after the national framework takes effect. For developers, the direction is clear regardless of what provincial rules eventually specify. On-site batteries that once served primarily as backup or curtailment tools would, under this framework, become active trading assets integrated into the commercial operation of a wind or solar plant from the moment a bid is submitted.

Businesses like Frontieras North America Inc. could be reading what is coming out of China and wondering when the rest of the developed world will catch up and design equally clear rules for clean energy markets.

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