On December 2, the National Development and Reform Commission and the National Energy Administration issued "Notice on Completing the Signing of Medium- and Long-term Electric Power Contracts in 2021”, which calls for widening of the electricity peak and off-peak price gap. The notice states that when two parties sign a time of use (TOU) contract, a peak and off-peak transaction price may be agreed upon, or a flat price can be determined by referring to the previous year’s average trading price, after which the peak and valley price will fluctuate based on the flat price.
The peak and off-peak price difference is an agreed clause of the electricity transaction contract between the purchaser and seller of electricity, implemented at both the power generation and consumption side to increase the peak and off-peak price difference. The notice also encourages power users to provide their own load curves and to sign medium and long-term power contracts, and encourages power selling companies and comprehensive energy service agencies to provide shorter period and more accurate load curves to help market players better participate in market transactions.
In addition to the announcement from the NEA and NDRC, on November 3, the Jiangsu Development and Reform Commission also released “Notice on Matters Concerning the T&D Electricity Prices and Electricity Sale Prices in the Jiangsu Power Grid from 2020 to 2022”. The notice proposes the further reduction of the off-peak price, widening of the price gap between peak and off-peak, making greater use of peak shifting, and encouraging the development of the energy storage industry.