China’s Green Electricity Certificates Crater on Renewables Jump

(Bloomberg) -- China’s booming renewable installations are causing a niche market for clean power in the country to crater.

The average daily transaction price for Green Electricity Certificates fell to 0.82 yuan per megawatt-hour on Saturday, according to data from an online trading platform for them. That’s down from an average of 22 yuan per megawatt-hour in February, according to BloombergNEF.

GECs are created when renewable energy is generated, and can be bought and used by polluters to help offset a portion of their emissions. The purchases can help owners of wind and solar farms make extra money beyond selling electricity to the grid.

Demand soared to 36.3 million certificates last year from about 3.9 million the year before as the government expanded the sectors they can be used in, such as for meeting government targets for reducing carbon emissions intensity, according to BloombergNEF. 

But that demand is being dwarfed by surging supply as renewables installations accelerate. While Saturday’s low price was likely influenced by limited trading activity during a public holiday, it’s part of a larger trend that’s seen prices for GECs tumble from about 50 yuan a megawatt-hour in 2021. 

The oversupply is unlikely to end anytime soon. GECs traded nationwide only accounted for about 13% of the total available supply as of late March, according to BloombergNEF.

On the Wire

Climate negotiators from the world’s top two greenhouse gas emitters — China and the US — are set to meet this week in Washington for talks on curbing potent planet-warming pollutants, promoting energy efficiency and other issues.

China’s trade data for April are likely to show exports and imports swinging back to year—on-year increases, in part due to less-challenging bases of comparison, according to Bloomberg Economics.

Chinese President Xi Jinping called on France to help fend off a “new Cold War” as the European Union increasingly aligns with US concerns over security risks and trade tensions.

This Week’s Diary

(All times Beijing unless noted.)

Tuesday, May 7:

• Energy and Mines Australia Summit in Perth, through May 8
• Nickel Producers, Processors & Buyers Conference in Jakarta, through May 8
• China’s foreign reserves for April, including gold
• Jinko and Trina among participants in Shanghai Exchange’s post-earnings briefing for solar companies, 15:00

Wednesday, May 8:

• CCTD’s weekly online briefing on Chinese coal, 15:00

Thursday, May 9:

• China’s 1st batch of April trade data, including steel, iron ore & copper imports; steel, aluminum & rare earth exports; oil, gas & coal imports; oil products imports & exports; soybean, edible oil, rubber and meat & offal imports ~11:00
• China to release April aggregate financing & money supply by May 15

Friday, May 10:

• China’s monthly CASDE crop supply-demand report
• China weekly iron ore port stockpiles
• Shanghai exchange weekly commodities inventory, ~15:30

Saturday, May 11

• China’s inflation data for April, 09:30

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