Key facts
- China is transforming its electricity market from state-managed to market-priced.
- The expansion of spot trading is increasing price volatility.
- Industrial users, power retailers, and renewable developers will be exposed to new risks.
China's long-standing efforts to reform its electricity market are entering a more disruptive phase. The move towards real-time spot trading means that price fluctuations will become more immediate, visible, and impactful. This transition exposes industrial consumers, electricity retailers, and developers of renewable energy projects to risks that were previously masked by the old administrative pricing system.