Gansu Electricity Spot Market Officially Launched

On September 5, the Formal Launch Conference of Gansu Electricity Spot Market and the 2024 Electricity Market Autumn Forum were held in Lanzhou, Gansu Province, marking the transition of Gansu Electricity Spot Market to official operation after 40 months of continuous trial settlement. This represents a significant milestone in Gansu's electricity development and provides a valuable "Gansu practice" for further deepening electricity market reforms.

The Official Launch Ceremony of Gansu Electricity Spot Market and the 2024 Electricity Market Autumn Forum [Photo by Li Xuan]

The electricity spot market is central to the electricity market system and a key component of the national unified market. Promoting the construction of this market is a significant measure to accelerate the establishment of a new electricity system. Through competition, market clearing prices that reflect the time and spatial values are formed. Combined with transactions of ancillary services such as frequency modulation and standby, this plays a crucial role in building an effectively competitive market structure and system, forming a mechanism where energy prices are predominately market-driven. 

Wind turbines [Photo by Li Xuan]

Gansu serves as an important national base and a comprehensive demonstration area for new energy, with a high proportion of new energy presenting both challenges and opportunities in the development of its electricity market. Under the strong leadership of the CPC Gansu Provincial Committee and Gansu Provincial People's Government, the State Grid Gansu Electric Power Co., Ltd. focuses on creating a Gansu demonstration of a new power system. Based on the development positioning of the "main hub" of the power grid in northwestern China, the "main channel" for west-to-east power transmission, and an "important base" supporting the construction of a new power system, the company has achieved several milestones: it became the first in China to pilot the electricity spot market, complete monthly settlement, and implement the self-declaration of predicted prices based on the efficiency of charging and emptying electricity at the supply end, and the only one in China to implement this rule at users' end. It has also established the first complete information disclosure system within the State Grid system. 

It has vigorously promoted the coordinated development of medium and long-term, spot, and ancillary service markets, and established a complete electricity market system suitable for provincial grids with a high share of new energy, injecting strong momentum into Gansu's economic and social development, and forming a "Gansu model" for electricity market development that can serve as a reference nationwide. The initiative has garnered widespread recognition from the governments and market participants.

Ultra-high voltage power transmission [Photo by Li Xuan]

Since becoming one of the first eight pilot projects for spot market construction in China in 2017, Gansu has made significant strides in building its electricity market, with the prototype of a comprehensive "medium and long-term + spot + ancillary services" market system taking shape. Following the idea of "unified market with two-level operation", Gansu has established and refined a regulation system that aligns with its energy structure, meets market demand, and aligns with national policies. In terms of trading mechanisms, trading cycles, trading modes, and trading varieties, Gansu ranks among the top in China. 

Gansu Electricity Spot Market builds a market structure of "medium and long-term differential contracts + full energy optimization," guiding efficient "generation-grid-load-storage" coordination through real-time price signals and ancillary frequency modulation mechanisms. This will not only enhance the flexibility and reliability of power system operation but also achieve the resource allocation to the broadest, most efficient, and optimal extent. During the "14th Five-Year Plan" period, Gansu's newly-added grid-connected capacity for new energy exceeded 33 million kilowatts, with wind power and photovoltaics becoming the first and second largest power sources in the province, respectively. Gansu's power is transmitted to 25 provinces and cities, turning its resource strengths into economic advantages and strongly supporting national power supply security.

Inside a power dispatch and control center [Photo by Li Xuan]

Since 2023, all new electricity demand in Gansu Province has been met entirely by new energy, making Gansu's power grid the most prominent example of a new power system in China. As of now, there are more than 6,000 registered market entities, and from January to July this year, electricity consumption reached 35.6 billion kilowatt-hours, accounting for more than 54 percent of the province's industrial and commercial electricity consumption. (Text by Li Xuan)