Provincial-level policies related to Document No. 136 are expected to be finalized by the end of April: a clash of titans and industry anxiety

According to the reverse schedule, the provincial-level supporting documents for Document No. 136 will be open for comments or initial draft discussions by the end of April at the earliest. PVs learned that a certain eastern province has notified development enterprises that the draft for comments will be released in late April, simultaneously launching a simulation bidding for the mechanism electricity price. "The formal document will be released after debugging, after which the formal bidding will commence."
According to PVs, the national government previously determined the pilot provinces for the provincial-level supporting documents of Document No. 136, including Shandong, Zhejiang, Guangdong, Liaoning, and Gansu, which are likely to be the first batch of provinces to release related documents.
In the recently released "Working Plan for New Energy Participation in the Electricity Spot Market (2025 Edition)" (draft for comments) by the Southern Power Grid, it is clearly stated that the Guangdong Provincial Energy Authority will pilot the release of the supporting work plan before the end of April, while Guangxi, Yunnan, Guizhou, and Hainan will release their supporting work plans before the end of December, guiding each province in key tasks such as the formulation of the upper and lower limits of mechanism electricity prices and bidding organization models.
PVs learned that policy frameworks from various provinces have been submitted recently, with some provincial policies nearing 100 pages in length.
Although the industry is anxiously awaiting the release of provincial-level documents, the drafting process has involved bringing together several different government departments, even those that rarely participated in new energy pricing in the past, making the entire process quite tortuous.
 

"Those who understand pricing don't understand new energy."

"Everyone is swamped with Document No. 136." Currently, the special task forces in various provinces generally include the Price Department of the Development and Reform Commission, the New Energy Department of the Energy Bureau, the power grid, the trading center, and the Energy Supervision Office. Some provinces are led by the Price Department, while others are led by the New Energy Department of the Energy Bureau.
In fact, effectively coordinating provincial-level policies with Document No. 136 is not an easy task. On the one hand, policymakers need to understand the actual situation of new energy.
For example, for centralized photovoltaic power stations, the time from obtaining indicators to completion and grid connection has increased from about one year previously to two years, while the cycle for wind power even takes 3-4 years, and the indicator implementation rate for large power stations is not optimistic in various provinces. In some provinces, due to land constraints, the implementation rate of ground power station indicators is only 20-30%. This will directly affect the proportion of mechanism electricity and the frequency of bidding in various provinces, such as whether to conduct one bidding per year or multiple biddings.
For another example, industry insiders have reported that some provinces, when setting mechanism electricity prices, use 20 years as the initial investment recovery period for photovoltaic power stations and then "calculate" that photovoltaic power station investment only requires a very low mechanism electricity price guarantee. In reality, in normal new energy project calculations, this recovery period ranges from 8-12 years. If policymaking is "detached" from the actual development situation of the new energy industry, various unexpected situations will arise in subsequent bidding work.
Some provinces also believe, when formulating policies, that the system costs of wind power and photovoltaics will continue to decline, and the guarantee period for mechanism electricity prices can be continuously shortened. However, in reality, the equipment manufacturers of wind power and photovoltaics, especially the photovoltaic industry chain, have been operating at a continuous loss in recent years. The space for reducing system costs is mostly offset by quality reductions.
It can be seen that in recent years, accidents have frequently occurred in wind turbines, photovoltaics, and energy storage power stations. Owners are gradually realizing that simply focusing on price bidding will inevitably bring serious quality risks to the reliable operation of power stations.
 

A clash of titans and industry anxiety

On the other hand, due to differing positions among different decision-making departments, there will inevitably be considerable "tug-of-war" in formulating provincial-level supporting documents. PVs learned that a certain provincial power grid company requires that the bidding for mechanism electricity prices be included in the scoring standards for new energy indicator allocation, with the lowest bidder winning. However, such scoring standards will obviously bring a series of risk problems to subsequent project implementation.
Although the New Energy Department is most familiar with new energy development, it does not understand the operation of the electricity market. For example, there are different opinions in many places regarding whether long-term electricity can enjoy mechanism electricity; also, in provinces where negative electricity prices occur, whether mechanism electricity should be settled; and after excluding green certificate income, who should enjoy green rights? Can the social demand for green electricity environmental premiums be converted into a price income source for new energy investment?
Several differences and details were not considered when Document No. 136 was formulating the national framework, and these issues are now falling on the shoulders of various provinces. Of course, the "power" to tailor the policy to the specific situation is also given to each province to decide.
Although Document No. 136 provides many boundary factors, including the non-hydropower consumption weight and the capacity of industrial and commercial users to bear the cost, some industry experts believe that "it still depends on how each province wants to develop new energy. For example, the recently released distributed photovoltaic management measures in Jiangsu and Guangdong. If the formal document is consistent with the draft for comments, and self-use ratio is not required, then there is no need to worry too much that the provincial policies of Document No. 136 will set the mechanism electricity price too low. The proportion of new energy installed capacity in each province, the power grid's capacity, the level of consumption guarantee, the demand for green electricity, the self-use ratio of distributed generation, and the height of the mechanism electricity price, the starting points of the two policies are actually the same."
 

The industry impact of Document No. 136 begins to surface

However, the impact of Document No. 136 on the industry is real. The suspension or postponement of wind and solar projects, and the cancellation of energy storage station procurement, are gradually surfacing. Recently, China Power Construction's 2025 annual centralized procurement of 51GW photovoltaic components was announced to be terminated. China Power Construction stated that due to recent adjustments in new energy pricing policies, the procurement needs of the bidder have changed, resulting in the termination of this procurement project.
China Power Construction is basically one of the largest EPC companies for new energy power station construction in China, and also includes some self-invested projects. The 51GW procurement is also known as the largest collective procurement in the industry, and the termination of such a large-scale procurement directly reflects the actual impact of Document No. 136 on the industry.
"Currently, the projects that are still being actively pursued are indeed top 10-20% high-quality projects in terms of investment, but this is only a very small number."
In recent communication between PVs and some power design institutes, it was also found that many design institutes are still in the process of demonstrating the logic of future investment calculations, "lacking a unified approach and understanding," and this process still needs to be digested and sorted out after the provincial policies are released.
But it is certain that most incremental new energy projects under this policy are in a state of temporary suspension of investment decisions, and when this impact will be digested is still unknown to the industry.
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