Supporting European Firms to Access Green Electricity in China
Business Roundtable Connects Enterprises, Regulators and Think Tanks
More than seven out of ten European firms in China are actively taking measures to become carbon neutral. However, limited access to green electricity remains a key challenge they face in their decarbonization efforts. Hurdles include insufficient supply of green power paired with underdeveloped inter-provincial trading capacity as well as unclarities regarding regulation for power purchase agreements (PPAs) or trading rules for Green Electricity Certificates (GECs).
Against this background, the Sino-German Energy Partnership partnered with the European Union Chamber of Commerce in China to co-host a business roundtable on June 18, 2024. The event focused on providing a platform for European firms to discuss challenges and solutions directly with relevant government organisations, think tanks and regulators to obtain first-hand information about policy trends. The roundtable attracted approximately 120 participants from 60 companies across various industries.
Connecting business and government to share insights on GECs and PPAs
Experts from the Beijing Power Exchange and the China Renewable Energy Engineering Institute shed light on policy developments related to GECs and PPAs. GECs represent one megawatt hour of electricity generated from renewable sources and are traded to verify the consumption of green electricity. Since the launch of GEC system in 2017, it has evolved to become the sole proof of the environmental attributes of renewable energy in China. PPAs, on the other hand, are contracts between green electricity producers and buyers to transfer a fixed amount of electricity over a specified period, offering a direct means of acquiring green power. The direct trade of green electricity via PPAs also generates GECs that are automatically transferred to the buyer, bypassing the GEC market.
Following the policy development, EUCCC summarised the primary challenges European companies face in accessing green electricity. These challenges include regulatory uncertainties, a mismatch between supply and demand, and difficulties in cross-provincial transactions. To provide reference for discussing the international recognition of GECs, a GIZ expert shared the development of Guarantees of Origin (GOs) in the EU and Germany.
The roundtable concluded with a panel discussion, allowing German/European companies and Chinese government organisations to engage directly with each other. The discussions highlighted the need for better alignment between supply and demand, contracting PPAs, interprovincial power trading, and challenges regarding the international recognition of GECs.
Impact & next step
This event marks an important step in addressing the energy needs of European companies in China, promoting collaboration, and advancing sustainability in the private sector. The roundtable discussions are expected to facilitate efficient and effective access to green electricity, contributing to global carbon reduction goals.
Moving forward, the Sino-German Energy Partnership will continue to update policy developments through newsletters and other communication channels. To further support German and European businesses in China in green electricity procurement, the Energy Partnership explores the possibility to host a second workshop on contracting long-term PPAs.