Zhejiang motivates power users to participate in power demand response by giving subsidy of CNY4/kWh

Zhejiang motivates power users to participate in power demand response by giving subsidy of CNY4/kWh

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As the yearly power demand peak season is approaching, Zhejiang Development and Reform Commission (DRC) announced the subsidy regime for power demand response to encourage energy storage facilities and other large load users to participate in the power peak-valley management.

Based on the "notice on the implementation of annual power demand response in 2020", the subsidy regime is formulated as below:

  • D-1(1-day-ahead) peak-regulating response: CNY4/kWh (max.)
  • D-1(1-day-ahead) valley-filling response: CNY1.2/kWh (fix rate during the year)
  • Real-time peak-regulating response: CNY4/kWh (fix rate during the year)

It is interesting to see the notice has specified that the Power Demand Response Subsidy of 2020 is funded by the profit derived from the transactions of the inter-provincial power spot market trading of renewable energy in 2019. In Shandong’s Work Plan of Power Demand Response in 2020 regarding special subsidy for power demand response, which was issued in June this year, it was also mentioned that the subsidy for demand response would also come from grid company’s profit from inter-provincial renewable spot market trading. This is quite an important sign, as the two provinces try to explore a market mechanism to incentivize the power users to participate in power demand response and relate it to the grid company’s business operation. (Dongying DRC Zhejiang DRC)

This article was compiled by Azure’s research team. If you are interested in knowing more about China’s renewable market, please feel free to contact us.