Could China’s New Energy Law Lead to Market Reform?

With distinct regulations covering coal, electricity, energy conservation, and renewable energy, China’s recently passed Energy Law closes a significant regulatory gap. With distinct regulations covering coal, electricity, energy conservation, and renewable energy, China’s recently passed Energy Law closes a significant regulatory gap.

With its comprehensive Energy Law, China has finally completed an 18-year legislative marathon. On November 8, the National People’s Congress Standing Committee approved the law, with an effective date of January 1, 2025. With separate laws already managing coal, electricity, energy conservation, renewable energy, and pipeline protection, the law closes a significant vacuum in China’s energy regulatory structure. As a foundational statute, it not only completes the legislative framework but also offers vital safeguards for development, transition, and energy security.

China’s first energy law aims to promote a low-carbon transition and ensure a safe, stable energy supply. The law addresses key issues such as ensuring a green transition and promoting a green transition. The final version includes a demand-side management system to encourage consumers to adjust their usage based on tiered and peak pricing. The state will prioritize renewable energy sources, supporting the safe, reliable, and orderly replacement of fossil fuels.

China will accelerate the construction of wind and photovoltaic power plants, giving equal emphasis to both centralized and distributed generation. As of June 30, China’s capacity for grid-connected wind and solar power generation reached 1.18 billion kilowatts, surpassing coal power capacity for the first time and accounting for 38% of the nation’s total installed capacity. The regulation aims to reduce waste of renewable energy by suppliers, with energy suppliers and distributors responsible for utilizing renewable energy and regulatory oversight to ensure green energy targets are met.