Both corporate consumers and renewable energy generators have welcomed the successful start to China's pilot scheme for green power trading, which was launched on Tuesday by the National Development and Reform Commission, the country's top economic regulator.
The new system is expected to further boost renewable energy development and accelerate its transition to a low-carbon regime in the country.
More than 250 companies from home and abroad took part in green power pilot trading on the first day, purchasing more than 7.9 billion kilowatt hours of green power, which is equivalent of reduction of standard coal burning of more than 2.43 million tons and reduction in carbon dioxide emissions of more than 6.07 million tons.
German chemical giant BASF, Hague-based global energy giant Royal Dutch Shell, China General Nuclear Power Group and internet and technology conglomerate Tencent were among the buyers of green power.
The regions covered by State Grid Corp of China saw green power transactions reach 6.9 billion kWh and those covered by China Southern Power Grid, whose business covers China's Guangdong province, the Guangxi Zhuang autonomous region, Yunnan province, Guizhou province and Hainan province, reached more than 1 billion kWh.
As many as 30 companies bought 910 million kWh of green power－300 million kWh from solar energy and 610 kWh from wind power－through the Guangzhou Power Exchange Center alone on Tuesday.
Under the pilot program, users who have demand for green power will directly trade with wind power and photovoltaic power generation enterprises. Other renewable energy generation enterprises will be included in the pilot program gradually, the NDRC said.
According to Zhang Mianrong, chairman of the Guangzhou Power Exchange Center, the pilot program, which began with wind and solar power, may be extended to hydropower and other renewable energies in the near future.
"The southern parts of China have a solid foundation for developing green power trade, with the solar and wind utilization rate in 2020 reaching 99.6 percent," he said.
He said he expects green power trading through the Guangzhou Power Exchange Center will reach 400 to 500 million kWh by the end of this year.
An analyst said the pilot will tap the potential of market mechanisms and facilitate the country's efforts to build a power system with new energy as the mainstay and achieve China's goals of peaking carbon emissions by 2030 and achieve carbon neutrality by 2060.
"The new energy development in China, after progressing rapidly in recent years with installed capacity ranking topping the world, is expected to further accelerate in the years to come as the government has been stepping up the construction of a power system dominated by renewable energy," said Zhu Jianquan, associate professor with the department of power engineering at the South China University of Technology.
"To support the sustainable development of new energy, a market mechanism is needed to enhance the cost efficiency of the low-carbon transition in the country's power system, and the green power trading system will further boost renewable energy development."
According to CGN New Energy Holdings Co Ltd, a subsidiary of China General Nuclear Power Group, the green power trading system will likely generate a reasonable profit for solar and wind power generators.
The company has signed purchase agreements with more than 20 companies, including BASF, Shell and Global Data Solutions Ltd. Total trades for green power exceeded 1.97 billion kWh, 25 percent of the country's total transactions, the company said.
State Grid Chairman Xin Baoan said the company will continue upgrading the trading system by optimizing the power grid dispatching system and adopting advanced technologies like blockchain, so as to record accurate and full information on green power production, transactions, consumption and other procedures.
On the stock markets, shares of companies in wind power and conventional electricity surged in the morning and afternoon sessions on Wednesday. Zhongmin Energy Co Ltd rose 9.95 percent to 9.28 yuan ($1.44) and Beijing Jingneng Power Co Ltd rose 10.06 percent to 3.39 yuan.