Thread by @pretentiouswhat

So! China released its new renewable power consumption quotas yesterday and added heavy industry into the list of obligated entities. A Big Deal!

I last wrote a thread about China's RPS ~4 years ago, but things have changed since then, so it's time for a commentary refresh. 🧵

But first, the basics. An Renewable Portfolio Standard (RPS) is a mandate for a company to consume a certain minimum % of renewable power in its electricity mix.

Different countries handle this in different ways. In China, it varies on a provincial basis.

In China, the RPS system is divided into "renewable power including hydro (the first column) and "renewable power excluding hydro (the second column)"

So an obligated entity in...Gansu, for example, must consume at least 52.76% renewable power, and 28.84% must be non-hydro.

The percentages are set according to the abundance of renewable resources in the local grid. So a place like Gansu, with it's abundant wind, solar, and decent hydro, has a pretty high RPS.

Sichuan, Yunnan and Qinghai have the highest in the country - 70% including hydro.

70% is the highest the RPS goes. I don't know why it's capped at that exactly. Sichuan's grid is probably higher than 70% annually.

Meanwhile, the non-hydro RPS quota peaks at 30%. Again, dunno why. 4 provinces are there already: Jilin, Heilongjiang, Qinghai, Ningxia.

The provinces with the lowest non-hydro RPS are usually the places with the worst wind and solar assets.

See Shanghai, Chongqing, Sichuan, Fujian, and Guangdong.

Xinjiang also has a remarkably low RPS quota (just 14.84%) in context of its massive solar and wind assets.

Anyway, the RPS quotas have reliably risen a few % points every year since the program was launched, so obligated entities have had to procure a little bit more renewable power each year to maintain compliance.

I like the RPS program a lot. It's stupidly simple, so it works.

The big deal this year is some HEAVY INDUSTRY has been added into the RPS program for the first time.

Preivously RPS only affected entities trading in the wholesale power markets. This was basically just grid companies, power retailers, and a few ultra-large wholesale buyers...

Now the first round of heavy industry has been folded into RPS as well, including steel, cement, polysilicon, and certain kinds of data centers.

This is on top of electrolytic aluminum, which has implemented an RPS scheme since 2024.

Simply put: heavy industry must buy green.

The heavy industry RPS levels are fixed to the provincial benchmark, so a cement producer in Gansu must now also consume 52.76% renewable power starting from 2025.

The only exception is "national hub node data centers" which have a uniform 80% green power quota nationwide!

Pushing heavy industry into RPS is the perfect complement to the end of the feed-in-tariffs for renewable generators.

Now, instead of selling to the grid at a fixed rate, they'll negotiate and sell to heavy industry producers, who are regulatorily mandated to buy green power.

Of course, RPS in China is tied to the Green Energy Certificate (GEC) program, which is only matched and settled on a monthly basis.

So in Gansu, you don't have to be 52% green on a daily basis; you only have to be 52% green on an average *monthly* basis.

The logical next step is to move to a more granular reporting system for RPS, where GECs are generated and time-stamped on an hourly basis, and where you can actually claim ownership of green attributes on a 24/7 basis, and claim to be 24/7 green...

But this is a distant goal.

Some obvious problems include: how do you track green attributes as they move through storage like a battery? How do you meet 24/7 green requirements when you don't even have fully operating spot markets in some provinces? etc.

But market-leading corporates are asking for it.

Within a few years, I expect all heavy industry segments will be pulled into the RPS (by 2030) and the spot markets will be fully operational by that time too, so we can start looking for 24/7 green solutions for corporates.

But for now, I'm quite pleased with this progress.

Here's a link to the pdf of China's RPS levels for 2025. Feel free to ask any questions about RPS, GECs, and compliance standards.

Among all the random stuff I talk about on Twitter, this is one of the things I actually do in my day job.

ndrc.gov.cn/xxgk/zcfb/tz/2…

*its not it's