Opportunities and risks of the renewable energy market
Renewable technologies remain the most immediate solutions for a low-carbon transition. With investors looking to unlock opportunities and corporates to decarbonise, developing the renewable energy (RE) market competence is now an imperative.
Key questions remain:
- How will the twin drivers of market liberalisation and carbon neutrality drive the future Chinese power market?
- What are the risks that investors, project developers, and corporate buyers will face? What are the potential upsides?
- How can market participants capture greater opportunities amidst a fast-changing business environment?
Fast-changing GBA power market and implications for market players
- New routes-to-market: Guangdong’s spot market is now in continuous operation. Inter-provincial trading into Guangdong provides alternative energy source. 14th five-year plan targets will drive more RE supply to come online. How to price RE competitively is thus key to market participants.
- Booming RE trading: As there remains a persistent green premium on RE, there lies opportunities to pursue emerging solutions such as power purchase agreements to mitigate price and energy security risks.
- New business models enabled: Market liberalisation avails significant revenue stacking opportunities for battery energy storage across energy arbitrage, grid stabilisation, and demand response services.
The chart below provides AFRY’s outlook on Guangdong’s future evolution of the electricity generation out to 2060.
AFRY’s electricity price projections cover all 30+ provincial markets across China out to 2060, on an hourly basis, and across five historical weather years to capture the variability in weather patterns on prices.
Our projections are considered by the industry to be independent, bankable, and trusted. With a team of energy market experts based locally, we are your trusted advisor in the Chinese market.
Have any questions? Reach out to Ms. Peipei Gao, AFRY’s China Management Consulting Lead, at email@example.com.
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