# Electricity spot market: the market dimension of the buildout

In the first half of 2026, spot trading carried **11.6%** of China's market-traded electricity, up from about **4.3%** in January–November 2025. The electricity spot market (电力现货) is still the thinner layer — medium- and long-term contracts (中长期) carried 88.4% — but it is where renewables at near-zero marginal cost set the price, and in surplus hours push it below zero.

## H1 2026: spot's share of traded power jumped (curated · sourced)

| | H1 2026 | Jan–Nov 2025 |
|---|---|---|
| Market-traded electricity | **3,684.8 TWh** (+24.2% y/y) | 6,030 TWh (secondary) |
| Medium- and long-term contracts | **3,256.8 TWh, 88.4%** | — |
| Spot | **428.0 TWh, 11.6%** | 261.3 TWh, ≈4.3% (secondary) |

- H1 2026 source: NEA press conference transcript, 30 July 2026 (https://www.nea.gov.cn/20260730/3ce671c387574eeeb120fc3825be0399/c.html), verified. NEA gives volumes in 100 million kWh (36,848 / 32,568 / 4,280). The 11.6% spot share is our arithmetic (4,280 / 36,848, the same as 100% minus NEA's 88.4%).
- Jan–Nov 2025 comparator: NEA monthly trading data as summarised by China News Service, 2025-12-25 (https://www.chinanews.com/cj/2025/12-25/10539928.shtml). Secondary: the page did not load for us and the volumes come from search-engine summaries; the ≈4.3% share is our arithmetic. A full-year 2025 spot volume from NEA was not found.
- NEA splits traded volume into medium- and long-term contracts and spot only; it has no "short-term" category. In November 2025 NEA described spot as generally within 10% of traded volume; H1 2026 came in above that. Spot volume is seasonal, so treat the jump as indicative until NEA publishes a full-year 2026 split.

## 2025 annual context

- **Market-traded volume hit 6,640 TWh in 2025 (+7.4%)** — the 4th straight year above 60% of all consumption (NEA press conference, 2026-01-30).
- **Medium- and long-term contracts carried ~95.7%** of that (6,350 TWh) per the 2025 China Electricity Market Development Report (NEA, June 2026).

That split is why prices can go negative without wrecking generators. Spot sets the marginal signal; medium- and long-term contracts guarantee the revenue base, with installed-capacity subsidies and the coal-power capacity price underneath.

## Supply finally flipped ahead of demand

- 2025 renewables added **519.3 TWh** — **more than the entire new electricity demand**.
- **Thermal generation fell for the first time in a decade** (−0.7%) to 6,330 TWh.
- Wind + solar hit **22% of generation**, up ~3.6 pts (wind 1,130 TWh, solar 1,170 TWh).

## The grid is re-tooling for high-renewable clearing

- Real-time market clears every **5 minutes** (96 → 288/day) across western Inner Mongolia, Zhejiang, Chongqing, Jiangxi and Shanxi.
- Cumulative installed new-type storage (excludes pumped hydro; mostly batteries) stood at **136 GW / 351 GWh** at end-2025, more than 40× the end-2020 level (NEA 2025 market report, as reported by China Energy News, 2026-06-15); VPP 16 GW, V2G 19 GW. This is the installed fleet, not the year's additions.
- Market participants grew from 47,000 to 81,000 over the 14th Five-Year Plan (2021-25), about 1.7×.

## Policy: trading the wires, unifying the market

- **Transmission-rights trading on the Yunxiao DC line.** From 1 June 2026, the right to use capacity on the Yunxiao DC line between Fujian and Guangdong (the link between the State Grid and China Southern Power Grid systems) is traded in a market, starting with monthly and shorter trades; grid companies must give all types of market entities equal access. NDRC + NEA, Notice on market-based trading of transmission rights on the Yunxiao DC line (NDRC System Reform [2026] No. 734), published 2026-06-02 (https://www.ndrc.gov.cn/xxgk/zcfb/tz/202606/t20260602_1405666.html). The notice does not single out private companies and does not describe a capacity auction; the bidding rules sit in an attached scheme we did not read.
- **A unified national power market by 2030.** By 2030, basically complete the national unified power market; all types of generators, and all electricity users except guaranteed-supply users, trade directly; market-traded electricity about 70% of total consumption. Provincial spot markets are to be in formal operation before 2027, and the system fully built by 2035. General Office of the State Council, Implementation Opinions on Improving the National Unified Power Market System (State Council General Office [2026] No. 4), published 2026-02-11 (read on the Hunan provincial government mirror: http://www.hunan.gov.cn/zqt/zcsd/202602/t20260212_33915878.html). The 2030 goal first appeared in NDRC + NEA, Guiding Opinions on Accelerating the Construction of a National Unified Power Market System (NDRC System Reform [2022] No. 118) (https://www.gov.cn/zhengce/zhengceku/2022-01/30/content_5671296.htm).

## Negative prices (负电价) are now systemic — a supply-surplus signal

- Shandong's first sub-zero clearing came in **2019**; by **2025** negative prices went near-normal:
  - **Zhejiang** (2025-01): two straight days at −0.2 yuan/kWh
  - **Western Inner Mongolia** (2025-04): to −0.004 yuan/kWh
  - **Sichuan** (2025-09): all-day negative — flat-out hydro (73% of capacity) + surging wind met falling cooling demand
- It's an **on-grid (generation-side) price signal**, not a loss: user bills still add transmission-and-distribution charges + government fund surcharges, and medium- and long-term contracts, subsidies and capacity prices keep generation revenue positive (e.g. Sichuan hydro's average settlement price in late September, 183 yuan/MWh, even beat the monthly 177).
- Even Germany — the reference market — saw 468 hours of negative prices in 2024 (~5% of the year).

NEA's own framing: **negative price is a "signal light"** for storage and demand-response to fill the surplus — not a malfunction.

## Method & honesty

The H1 2026 split is NEA's (press conference of 2026-07-30); the spot share is our arithmetic from its volumes. The Jan–Nov 2025 comparator is secondary and approximate. The 2025 annual figures come from the NEA-published "2025 China Electricity Market Development Report" (June 2026) and NEA press conferences (2026-01-30, 2025-11-05), People's Daily, CCTV / China National Radio's Voice of China, and provincial development and reform commission releases (2025–2026). Negative-price cases are NEA-reported and directional, not a consolidated national statistic; negative prices are regional and seasonal. Medium- and long-term volume (6,350 TWh) vs total market volume (6,640 TWh) are different NEA figures — read them as volume vs share, not a reconciled ledger. Policy summaries are from the notices themselves.