China will provide payment guarantees to coal power producers

China's government authorities will provide payment guarantees to coal power producers according to their capacity. 

At a meeting on Friday, state officials in the country announced that coal power producers will be guaranteed payments based on their installed capacity, regardless of how much energy they actually produce. The application in question will come into force on January 1, 2024.  

This move by the Chinese government aims to create a more stable electricity market.  The National Development and Reform Commission (NDRC) stated that coal power plants in most regions of China could recover about 30 percent of their capital costs between 2024 and 2025.  

Capacity payments will be calculated based on fixed costs of 330 yuan ($45.25) per kilowatt per year for coal power plants. In the statement, it was stated that the capacity payment rate will be increased to at least 50 percent in all regions as of 2026.