China’s solar and windfarms would no longer be guaranteed sales at a fixed price linked to coal benchmarks, under a new policy released by the central government.
The policy asks local governments to shift new wind and solar projects to a more market-based pricing system by the end of 2025.
Said local governments will determine the details of the proposed “sustainable new-energy pricing mechanism” (新能源可持续发展价格结算机制).
In broad terms, however, the idea is that new wind and solar schemes would be paid a fixed price determined at auction in a system that resembles the UK’s “contract for difference” mechanism.
The move is part of wider efforts to shift the operation of China’s giant electricity system towards more market-based signals, rather than administratively set prices.
It also reflects a growing need to manage the integration of renewables into the system, with record wind and solar capacity added last year creating “conflict” with coal power.
While existing projects would continue to be paid under the old system, new wind and solar schemes will face a more uncertain business outlook, analysts tell Carbon Brief.
However, they say that, in the long run and with the right implementation strategies, the new mechanism could make renewables more innovative and even more cost-effective for power consumers, compared to coal.
More ‘market-oriented’
From 2026, China has announced that the price of electricity generated from solar and wind schemes will be determined according to competitive auctions.
This will replace the existing fixed rates solar and wind received for their power, which was pegged to benchmarks for coal-fired power, with the new mechanism likely making prices for renewables much cheaper than coal.
The new system resembles the two-way “contract for difference” (CfD) mechanism used in the UK and elsewhere. Under this type of mechanism, power generators are paid a fixed “strike price” for each unit of electricity they produce.
If market prices for power fall below this level, generators receive the difference as a top-up payment, but they must pay back the difference if prices rise above it instead.
This setup would allow developers to have “reasonable and stable expectations” for revenue, which will support a “healthy” industry and China’s energy transition, representatives of the National Development and Reform Commission (NDRC), China’s top economic planning body, and National Energy Agency (NEA) say in an official Q&A on the policy.
Despite some reporting to the contrary, the move does not constitute a rollback of subsidies for renewables, as grid operators have paid the same price for coal-fired power and wind and solar power since 2021.
Bringing prices up to date
The change to the rules has been attributed to the sharp reduction in the cost of building new solar and windfarms, prompting questions around whether renewable generators should be paid the same amount as infrastructure-heavy coal plants.
“The coal-fired grid benchmark rate was last updated in 2017 and actually has no relationship to the generation cost of renewables,” David Fishman, senior manager at the energy consultancy Lantau Group, tells Carbon Brief, adding the price was effectively “arbitrary”.
The NDRC and NEA Q&A argues that renewable energy schemes operating on a fixed tariff “cannot fully reflect market supply and demand” and do not “fairly [distribute] responsibility for power system flexibility”.
Fishman adds that the timing of the announcement may have been linked to the situation China experienced late last year, which saw unusually high curtailment of renewable energy at a time when analysts expected low-carbon power to cover new demand growth.
An analysis written in summer 2024 by Shi Jingli, a researcher from the NDRC-affiliated Energy Research Institute (ERI), argued that the UK’s CfD system “significantly reduced renewable energy tariffs and the government’s overall expenditure on renewable energy projects”, which also indicates that cost may be a driving factor behind the change.
Other changes
The new rules will only apply to projects developed from June 2025 onwards. They will apply to all sources of wind and solar power, from huge clean-energy “bases” to distributed generators such as solar rooftops.
In order to facilitate the increasingly market-based operation of the electricity system, the new notice encourages local governments to “improve spot market trading rules” and “accelerate” voluntary participation in day-ahead trading.
It also encourages the increased use of multi-year power purchase agreements (PPAs) and other forms of medium- and long-term contracts, among both renewable projects developed before the June 2025 cut-off date (called stock, 存量) and new schemes (called incremental, 增量).
Meanwhile, energy storage requirements for new wind and solar projects have been revoked, in a move that economic news outlet Jiemian says “will have a huge impact on the energy storage industry”.
The policy also notes that local authorities could consider implementing similar systems for biomass, geothermal and other power generators.
No pain, no gain
The exact impact that this will have on renewable developers will depend on the implementing rules adopted by local governments, according to Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air (CREA).
In the short-term, these companies will be hit by the loss of the guaranteed demand and the need to adapt to the low prices and fierce competition of the new system, Fishman says.
Many projects initially slated for completion later in 2025 may be rushed through in order to be eligible to stay on the current system, resulting in a spike in added capacity in the second quarter of the year followed by a dip in the third quarter, he tells Carbon Brief.
Companies will also need to pivot to have stronger marketing and sales capabilities, says Wang Jihong, senior counsel at law firm Zhong Lun, as the policy encourages greater uptake of renewable energy through PPAs. In an article published by Lexology she advises companies to focus on “high-efficiency” and “large-capacity” technologies.
This may have an impact on China’s growing distributed solar and wind sectors.
Distributed projects are much more likely to be run by smaller companies who may not have the resources to adapt to the new mechanism, according to Fishman, which could cause opportunities for distributed energy to “dry up”.
At the same time, the new policy may also force renewable energy power companies to innovate – both in terms of technology, and of business models and management practices, says Dr Muyi Yang, senior energy analyst for Asia at the thinktank Ember.
Yang tells Carbon Brief:
“[The new regulations] will help shift the clean energy sector from ‘subsidy-dependency’ to being ‘innovation-driven’ and contributing to innovation-based growth – what is often referred to in China as ‘new quality productive forces’.”
Stronger in the long-term?
The new pricing system may nevertheless give wind and solar the advantage in the long-term. Reform of the power market has long been seen as crucial to increasing uptake of renewables.
The new prices are expected to be much lower than the tariff for coal power. Myllyvirta writes that wind and solar, as the “most affordable” sources of power, should be able to “hold their own in competition if the rules are set right”.
The cost of developing solar and wind power has halved over the past ten years, an expert tells 21st Century Business Herald.
Yang tells Carbon Brief that the pressure of being subjected to the market could make low-carbon energy “more competitive” and “help reduce inefficient investment”, which will be a “critical factor for the long-term transition of China’s energy sector”.
But local governments would need to take steps to maintain investor confidence in the face of low prices, Fishman says. For example, significantly raising provincial renewable consumption targets could provide a strong demand signal, showing wind and solar developers that there is still a “way to make money” through increased volume.
If the government “gets the numbers just a little bit wrong”, he says, the amount of new wind and solar being added to the grid “will drop off a cliff”.
At the same time, coal-fired power plants are continuing to receive policy and financial support, in the form of guaranteed demand from long-term contracts and compensation to keep excess capacity online.
China has ramped up construction of new coal plants, with almost 100 gigawatts of new capacity expected to come online in the next few years, according to recent research by CREA and Global Energy Monitor.
If they are not exposed to competition in the same way that wind and solar farms will be, Myllyvirta argues, then renewables may be “crowded out from the power market by inflexible coal plants”.
Fishman is more sanguine about the future role of coal, however. He tells Carbon Brief that the new policy may give coal plants “a little bit of a boost” in the short-term, but that China’s carbon peaking goal sets a hard deadline for reducing their role in the power system and means they will face “diminishing returns”.
He adds that the real competition for coal plants are other coal plants, as only the “newest, the most efficient [and] the super-critical” plants will have a future as China moves towards carbon neutrality.
The post Explainer: How China’s renewable pricing reforms will affect its climate goals appeared first on Carbon Brief.
Explainer: How China’s renewable pricing reforms will affect its climate goals
Discussing climate change can make a difference. Focusing on the impacts in everyday life is a good place to start, experts say.
When Bad Bunny climbed onto broken power lines during his Super Bowl halftime show, millions of viewers saw a spectacle. Climate communicators saw a lesson in how to talk about climate change.
Wondering How to Talk About Climate Change? Take a Lesson from Bad Bunny
Sydney, Thursday 19 March 2026 — In response to escalating attacks on gas fields in the Middle East, including Israeli strikes on Iran’s giant South Pars gas field and Iranian retaliations on gas fields in Qatar and Saudi Arabia, the following lines can be attributed to Solaye Snider, Campaigner at Greenpeace Australia Pacific:
“The targeting of gas fields across the Middle East is a perilous escalation that reinforces just how vulnerable our fossil-fuelled world really is.
“Oil and gas have long been used as tools of power and coercion by authoritarian regimes. They cause climate chaos and environmental pollution and they drive conflict and war. The energy security of every nation still hooked on gas, including Australia, is under direct threat.
“For countries that are reliant on gas imports, like Sri Lanka, Pakistan and South Korea, this crisis is just getting started. It can take months to restart a gas export facility once it is shut down, meaning the shockwaves of these strikes will be felt for a long time to come.
“It is a gross and tragic injustice that while civilians are killed and lose their homes to this escalating violence, and families struggle with a tightening cost-of-living, gas giants like Woodside and Santos have seen their share prices surge on the prospect of windfall war profits.
“We must break this cycle. Transitioning to local renewable energy is the way to protect Australian households from the inherent volatility of fossil fuels like gas.”
-ENDS-
Images available for download via the Greenpeace Media Library
Media contact: Lucy Keller on 0491 135 308 or lkeller@greenpeace.org
Greenpeace response to escalating attacks on gas fields in Middle East
Climate Change
DeBriefed 20 March 2026: Energy crisis deepens | Brazil’s new climate plan | New Zealand climate case
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Iran war fallout continues
WORK FROM HOME: The International Energy Agency has advised its member countries to take 10 steps in response to the ongoing energy crisis fuelled by the Iran war, including reducing highway speeds and encouraging people to work from home, said the Guardian. It came after retaliatory attacks between Israel and Iran continued to destroy energy infrastructure in the Middle East, causing energy prices to soar further, said Reuters.
SUPPLY DISRUPTED: The IEA also said it is prepared to make more of its member nations’ 1.4bn-barrel oil reserves available to help ease the impacts of what it called the “biggest supply disruption in the history of the oil market”, reported Bloomberg. The outlet noted that Asian countries have been hit hardest by the shortages, caused by a “near-halt” of shipping through the Strait of Hormuz.
EU SUMMIT: The energy crisis dominated talks at an EU leaders summit on Thursday, said Politico. Arriving at the summit, Spain’s prime minister Pedro Sánchez attacked other European leaders for using the energy crisis as an excuse to “gut climate policies”, according to the EU Observer. The Financial Times said that some European leaders have asked the European Commission to overhaul its flagship emissions trading system (ETS) by summer in response to the energy crisis.
COAL BOOST: In response to the conflict, utility companies in Asia are “boosting coal-fired power generation to cut costs and safeguard energy supply”, said Reuters. UN climate change executive secretary Simon Stiell told Reuters: “If there was ever a moment to accelerate that energy transition, breaking dependencies which have shackled economies, this is the time.”
Around the world
- WINDFARM WINDFALL: The Trump administration in the US is considering a nearly $1bn settlement with TotalEnergies to cancel the French energy company’s two planned windfarms off the US east coast and have it instead invest in fossil-gas infrastructure in Texas, according to documents seen by the New York Times.
- BUSINESS CLASH: Following “clashes” with the agribusiness sector, Brazil launched its new climate plan, which calls for a 49-58% reduction in greenhouse gas emissions from 2022 levels by 2025 and includes “specific guidelines for different sectors”, reported Folha de Sao Paolo.
- SALES SLUMP: Sales of liquified petroleum gas from India’s state-run oil companies have fallen by 17% this month due to cuts in deliveries to commercial and industrial consumers “amid the widespread logistical bottlenecks triggered by the Iran war”, said the Economic Times.
- CUBAN ENERGY CRISIS: The US imposed an “effective oil blockade” on Cuba, leaving the country facing its “worst energy crisis in decades”, reported the Washington Post. Meanwhile, Chinese exports of solar panels to the island have “skyrocketed” since 2023, it added.
- RECORD HIGHS: An “unprecedented” heatwave in the western and south-western US is “shattering dozens of temperature records” and could lead to drought in California in the coming months, reported the Los Angeles Times.
- VULNERABILITY CONCERNS: Landslides that killed more than 100 people in southern Ethiopia have “renewed concerns about Ethiopia’s vulnerability to climate-related disasters”, said the Addis Standard.
1%
The percentage of England’s land surface that could be devoted to renewables by 2050, according to the long-awaited “land-use framework” released by the UK government this week and covered by Carbon Brief.
Latest climate research
- Approaching international climate action by shifting the burden of mitigation onto higher-income countries could avoid 13.5 million premature deaths from air pollution in middle- and lower-income countries by 2050 | The Lancet Global Health
- Beavers can turn the ecosystems surrounding streams into “persistent” sinks of carbon that can sequester an order of magnitude more than non-beaver-modified ecosystems can store | Communications Earth & Environment
- Mobile-phone data from seven diverse countries during the summer heatwaves of 2022-23 showed a “widespread tendency to withdraw into homes” and an increase in out-of-home activities that can offer cooling, such as indoor retail | Environmental Research: Climate
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
Carbon Brief this week published a significant update to its map of how climate change is affecting extreme weather events around the world. The map now includes 232 new extreme weather events from studies published in 2024 and 2025. Of these events, 196 were made more severe or more likely to occur by human-driven climate change, 12 were made less severe or less likely to occur and 10 had no discernible human influence. (The remaining 14 studies were inconclusive.)
Spotlight
New Zealand breaks new ground on climate litigation
This week, Carbon Brief speaks to experts about a first-of-its-kind climate lawsuit in New Zealand.
Earlier this week, representatives from two environmentally focused legal advocacy groups challenged the New Zealand government’s climate-action plan in court.
The plaintiffs argued that the measures laid out in the plan are insufficient to achieve the country’s legal obligation to hold global warming to 1.5C above pre-industrial temperatures.
The case could be “influential” in shaping lawsuits and rulings around the world, one legal expert not involved in the case told Carbon Brief.
Reductions vs removals
The new case contends that there are several issues regarding the New Zealand government’s response to climate change.
One of the key arguments the plaintiffs make is that New Zealand’s second emissions reduction plan, which covers the period from 2026-30, is overreliant on the use of tree-planting to achieve its targets.
When the plan was released in December 2024, it was “immediately clear that it was a pretty lacklustre plan”, Eliza Prestidge Oldfield, senior legal researcher at the Environmental Law Initiative, one of the groups behind the legal case, told Carbon Brief.
The plan called for large-scale planting of pine tree plantations, which are not native to New Zealand and have a high risk of burning. Because of this, there are concerns about how permanent any carbon removal provided by these plantations actually can be, experts told Carbon Brief.
Catherine Higham, senior policy fellow at the Grantham Research Institute on Climate Change and the Environment who was not involved in the case, said:
“The lawyers are arguing that there are real challenges with equating the emissions that you may be able to remove from the atmosphere through afforestation with actual emissions reductions, which are much more certain.”
‘Global dialogue’
While other climate lawsuits elsewhere in the world have also focused on the inadequacy of a government’s plan to meet its stated emissions-reduction targets, this is the first such case that addresses the role of removals head-on.
Lucy Maxwell, co-director of the Climate Litigation Network, told Carbon Brief that the lawsuit “builds on a decade of climate litigation” in national, regional and international courts.
Maxwell, who was not involved in the New Zealand case, added that there is a “real global dialogue” between, not just plaintiffs, but national courts as well. She said:
“[National courts] look to common issues that have been decided in other countries. They’re not binding on that court if it’s at the national level, but they are influential.”
Given that many other countries have legal frameworks requiring their governments to create plans outlining the pathway to their long-term climate targets, Prestidge Oldfield told Carbon Brief that other jurisdictions “should be interested in these questions around the level of certainty”.
Higham noted that, even if the case is successful, addressing the plan’s shortfalls will face its own set of challenges. She told Carbon Brief:
“A lot of these decisions are political and they can be politically contentious…Those [measures] have to be put into action through legislation and that is then subject to the usual political process. So that’s where the challenge comes in.”
While she could not speculate on the outcome of the case, Prestidge Oldfield said it was “very heartening” to see that both the judge and the opposing counsel “appreciated how much of a concern climate change is globally”.
She added:
“It’s not a given that the judge would even be interested in climate change.”
Watch, read, listen
COMMON APPROACH: The Heated podcast analysed fossil-fuel advertisements and highlighted the most common deception tactics they employed.
THREAT ASSESSMENT: Mongabay mapped the potential threat that oil extraction poses to Venezuela’s ecosystems, including the Amazon rainforest and its coral reefs.
SALT LAKES? GREAT!: High Country News interviewed journalist Dr Caroline Tracey about her new book on saline lakes – such as Utah’s Great Salt Lake – the threats that face them and what they can teach us.
Coming up
- 23 March-2 April: Third meeting of the preparatory commission for the High Seas Treaty, New York
- 24-27 March: 64th session of the Intergovernmental Panel on Climate Change, Bangkok
- 26-29 March: 14th ministerial conference of the World Trade Organization, Yaoundé, Cameroon
Pick of the jobs
- International Centre of Research for the Environment and Development (CIRAD), IPCC chapter scientist | Salary: €3,200-3,750 per month. Location: Nogent-sur-Marne, France
- Avaaz, chief of staff | Salary: Dependent on location. Location: Remote, with preferred time zones
- Green Party, social media officer | Salary: £31,592-£32,192. Location: Remote or Westminster, UK
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 20 March 2026: Energy crisis deepens | Brazil’s new climate plan | New Zealand climate case appeared first on Carbon Brief.
-
Greenhouse Gases7 months ago
Guest post: Why China is still building new coal – and when it might stop
-
Climate Change7 months ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change Videos2 years ago
The toxic gas flares fuelling Nigeria’s climate change – BBC News
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits
-
Renewable Energy2 years ago
GAF Energy Completes Construction of Second Manufacturing Facility