The Shanghai Municipal Development and Reform Commission, along with three other government departments, released on May 22 a set of measures to promote the consumption of green power in the city.

The three other departments are the Shanghai Municipal Commission of Economy and Informatization, the Shanghai Municipal Commission of Commerce, and the Shanghai Municipal Commission of Ecology and Environment.

Here are some highlights from the document.

I. Timelines

By 2025:

The trading mechanism for green electricity and green electricity certificates will be gradually improved, and the construction of related pilot projects will be steadily advanced.

The capacity for green electricity consumption will be significantly enhanced, with the scale of green electricity trading expected to exceed 5 billion kilowatt-hours.

By 2030:

The supply and consumption of green electricity will diversify. Green electricity consumption will become a new societal trend, with the coverage rate in key industries and enterprises reaching the national advanced level.

Shanghai aims to become a benchmark city for green electricity consumption, with the scale of green electricity trading projected to reach 30 billion kilowatt-hours.

II. Expand green electricity market

1. Diversification of supply

Utilize local green electricity resources effectively: Implement the "Photovoltaic+" programs, expedite the development of near-shore and offshore wind power, establish onshore wind farms, integrate biomass power generation projects with household waste incineration facilities, promote geothermal energy development, and initiate projects for marine energy utilization.

Ensure clean electricity supply from external sources: Accelerate the Ultra-High Voltage project to import power from Inner Mongolia to Shanghai, strengthen energy and power cooperation in the Yangtze River Delta region, and expand the consumption of green electricity from external sources through market-based transactions.

Promote active involvement of local green electricity enterprises in the city's green electricity trading, and annually disclose the scale and ranking of green electricity transactions by power generation enterprises to the public.

2. Trading mechanisms

Shanghai will develop supporting implementation rules for green electricity trading within the city.

For inter-provincial green electricity trading, Shanghai will adopt measures outlined in the "Beijing Power Exchange Center's Implementation Rules for Green Electricity Trading (Revised version)".

Shanghai will introduce various types of green electricity, such as wind, photovoltaic, and biomass, into local green electricity trading. Starting from September 2024, new grid-connected green electricity trading enterprises will be required to build or purchase energy storage and peak-shaving capacity. Existing new energy sources will generally be granted a three-year exemption period, with adjustments to be made as necessary.

Shanghai will establish diversified green electricity trading models tailored to the needs of electricity users and the characteristics of power generation entities.

3. Distribution of trading revenues

Green electricity trading prices encompass both the value of electrical energy and the environmental benefits. Power generation enterprises will be categorized based on criteria such as a receipt of national subsidies and the origin of low-cost electricity.

For power sources subsidized by national renewable energy initiatives, any environmental benefits derived from participation in green electricity trading, exceeding the benchmark electrical energy price, will either offset national renewable energy subsidies or be remitted to the State.

For power sources not benefiting from national subsidies, both the value of electrical energy and environmental benefits are retained by the enterprise.

In case of low-cost electricity stemming from competitive allocation or national pricing, the price difference below the benchmark electrical energy price (tentatively set as the benchmark price for coal-fired power generation in this city, subject to adjustments according to relevant national and local regulations in the future) will be proportionately used to maintain stability in electricity prices for industrial and commercial users.

4. Trading of distributed green electricity

Shanghai will explore methods to facilitate the participation of distributed renewable energy in green electricity trading while drafting the implementation rules for intra-city green electricity trading. This initiative will account for the dispersed nature and multiple access points of distributed renewable energy.

Distributed renewable energy projects, after reasonable contribution to offset the associated grid costs, government subsidies, and additional charges, can register in the market. Trading activities will commence through bilateral negotiations and listing, with all eligible electricity volumes participating in local green electricity trading autonomously or through aggregation.

Actual volumes of grid-connected electricity will be subject to prevailing market prices and will bear any associated market gains or losses.

III. More scenarios for green electricity certificates

1. Registration of renewable energy projects

Shanghai will collaborate with the State Grid Shanghai Municipal Electrical Power Company, local power trading institutions, and local renewable energy generation enterprises to expedite the registration process for renewable energy projects.

The focus will be on enhancing the percentage of registered renewable energy generation projects and expediting the issuance of green electricity certificates.

By the end of June 2024, the objective is to substantially complete the registration of all centralized renewable energy generation projects in Shanghai, while significantly increasing the registration for distributed projects.

2. Integration of GECs with energy consumption/intensity control

Shanghai will include traded green electricity certificate volumes in the evaluation framework for energy conservation targets in districts and key sectors during the 14th Five-Year Plan period.

Renewable energy purchased in the inter-provincial market will be considered part of Shanghai's renewable energy consumption, while volumes corresponding to GEC transactions will be accounted for based on the flow of GEC transactions.

3. Support for carbon footprint management

Shanghai will advocate for the utilization of GECs in the city’s carbon footprint calculation system for key products. Efforts will be made to determine the general applicability and certification methods of GECs in calculating product carbon footprints.

GECs will be actively considered in providing carbon labeling for products in key sectors and mature industries.

4. International recognition of GECs

Shanghai encourages industry associations, enterprises, institutions, and experts to promote the development of international standards for GEC issuance, measurement, and trading through various bilateral and multilateral international exchange channels.

IV. Enhancing green electricity consumption

1. Fostering a positive environment for green electricity consumption

Shanghai aims to increase the proportion of green electricity consumption in the city by multiple measures.

Key energy-consuming enterprises will be encouraged to develop specific plans for substituting traditional energy with green electricity. When appropriate, the city will disclose these enterprises' green electricity consumption ratios to the public.

Export-oriented enterprises and industry-leading companies will serve as role models. A select group of high energy-consuming enterprises and industrial parks that meet the criteria and express willingness will be chosen to pilot full green electricity consumption.

2. Promoting green electricity applications in key areas

Shanghai encourages enterprises and industrial parks to develop distributed photovoltaics, decentralized wind power, and diverse energy storage solutions, building green industrial microgrids.

The city also promotes the integration of photovoltaic technologies into buildings, including the development of PEDF (Photovoltaic, Energy storage, Direct current and Flexibility) buildings, low-carbon and zero-carbon buildings, and energy-producing buildings.

Following the principle of "install wherever possible", photovoltaic facilities will be added to new railway stations, civil airports, ports, and logistics hubs. This will create a smart energy system for comprehensive transportation hubs integrating "photovoltaics + energy storage + microgrids."

All independent metering commercial and industrial charging stations will be guided to participate in green electricity trading. Other commercial and industrial charging stations, as well as private charging stations, will be explored for priority green power allocation, increasing the proportion of green electricity consumption by new energy vehicles.

Additionally, the integration of new infrastructure such as 5G base stations, data centers, and supercomputing centers with renewable energy will be promoted.

V. Improving green electricity accounting system

1. Enhancing collaboration between green electricity and carbon markets

Shanghai will leverage its leading position in the carbon market and carbon finance to explore collaborative pathways between the electricity and carbon markets. The city aims to continuously enhance the connection mechanism between green electricity consumption and local carbon trading.

A standardized carbon emission calculation and accounting system will be developed to incorporate green electricity consumption into carbon emission accounting rules for various localities, industries, and key products.

Shanghai will regularly publish carbon emission factors for power and heat applicable to different scenarios.

An information-sharing mechanism will be established to link green electricity consumption with carbon trading and voluntary emission reduction transactions, ensuring that the environmental attributes of renewable energy are not double-counted.

Additionally, the feasibility of applying GECs in the city's carbon market management and operations will be studied to diversify the compliance options for enterprises regulated by the carbon market.

2. Developing a city-wide accounting standard for green electricity consumption

Shanghai will utilize blockchain technology to comprehensively record information on green electricity production, trading, and consumption, ensuring reliable traceability throughout the lifecycle of green electricity.

A green electricity consumption certification system tailored to Shanghai’s specific conditions, adhering to uniform standards, and aligning with international practices will be established.

The rules and norms for accounting for green electricity consumption will be refined through the power trading platform and accounting system. A database of corporate green electricity consumption will be created, providing detailed green electricity consumption lists and reports.

3. Promoting information disclosure on green electricity consumption

Shanghai will establish a city-wide system to demonstrate the production and consumption of green electricity and GECs.

The system will update information on green electricity production daily. It will also continuously calculate and update the consumption of green electricity and green certificates based on the general consumption accounting standards.

Real-time query and display of green electricity consumption by region, industry, and user will be introduced when appropriate.

VI. Technology support for green electricity consumption

1. Advancing construction of intelligent power trading platform

Shanghai is advancing the development of an intelligent power trading platform to facilitate the entire process of green electricity and GEC transactions. This includes activities such as registration, settlement of electricity fees, and information inquiries, all of which will be conducted digitally on the trading platform.

The platform will feature a dedicated section specifically for green electricity and GEC trading, offering streamlined services for businesses.

Shanghai will also work toward integrating this power trading platform with the Shanghai Green Finance Service Platform, with a focus on sharing information on green electricity trading and disclosing green credit information for trading entities.

2. Promoting application of innovative technologies

Efforts will be made to accelerate the research of key technologies such as the aggregation of distributed micro-resources, charging and discharging characteristics of new energy storage systems, and the cluster control of electric vehicles.

The integration of emerging technologies such as artificial intelligence, Internet of Things, and blockchain with renewable energy will be promoted to develop new production and consumption models that are intelligent, interconnected, and shared.

3. Strengthening green electricity service system

Shanghai will establish micro service points for green electricity at all A-grade electric utility customer service offices across the city. These points will handle businesses related to green electricity and GEC trading, providing unified services like policy explanations, demand coordination, transaction guidance, and certificate issuance.

By 2025, all electric utility customer service offices in the city will have these green electricity service points, enabling customers to access service within a 15-minute walk.

Source: shanghai.gov.cn