China pushes towards market-driven energy pricing

China's electricity market reached a new milestone in 2025, with traded power volume surging to a record 6.64 trillion kilowatt-hours (kWh), as the nation accelerates its transition toward market-driven energy pricing.

The total volume represents a 7.4 percent year-on-year increase, accounting for 64 percent of China's total electricity consumption, a 1.3 percentage point rise from the previous year.

The data released on Friday by the National Energy Administration (NEA) underscores Beijing's success in shifting toward a more flexible, competitive power system capable of handling a high-tech industrial economy.

The shift toward a unified national power market was evidenced by the rapid growth in inter-provincial and inter-regional trading, which rose 11.6 percent over the full year to reach 1.59 trillion kWh. This growth outpaced intra-provincial trading, which grew at a more modest 6.2 percent, it said.

The most significant growth occurred in the green electricity sector. For the full year, green power trading volume skyrocketed by 38.3 percent to reach 328.5 billion kWh, it said.

This trend intensified in the final month of the year. In December alone, green power transactions hit 31.7 billion kWh, a 32.3 percent year-on-year jump.

While medium- and long-term contracts remained the bedrock of the market, the spot market is also beginning to gain traction, it said.