In this blog post, we explore the trends shaping growth in China’s Green Electricity Certificate (GEC) market, and the opportunities for businesses seeking to leverage this development.
What are the trends shaping China’s GEC market?
Growth in renewables
In 2024, China’s renewable energy capacity reached a record high of 56% of the country’s total energy capacity, with 86% of new capacity installed in the year coming from renewables. In total, cumulative renewable energy capacity reached 1.889 TW.
The IEA forecasts China to install more than 3,200 GW of new renewable capacity between 2024 to 2030. Solar is predicted to contribute around 80% to new capacity.
Growth in renewable electricity generation
The country’s renewable energy generation reached 3,460 TWh in 2024, an increase of 19% from the previous year. This represented about 35% of the total electricity generated.
Growth in GEC issuance and trading
Correspondingly in the same period, the GEC market grew exponentially. More 4.73 billion GECs were issued in 2024, a year-on-year increase of 28.4 times. Around 3.158 billion were tradeable GECs. Wind, solar and hydropower assets accounted for 41%, 17% and 32% of the GECs issued respectively.
According to China’s National Energy Administration, the cumulative number of GECs issued reached more than 4.95 billion as at the end-2024.
A total of 446 million GECs were traded nationwide in 2024, representing a year-on-year increase of 3.6 times. The cumulative number of GECs traded was nearly 553 million as at end-2024.
Favourable government policies
The Chinese government has outlined a roadmap for the development of the GEC market. The roadmap includes strategic initiatives including strengthening the GEC ecosystem, establishing information and data sharing with the China Certified Emissions Reduction (CCER) market, and pushing for international recognition of the GEC.
What is the outlook for businesses with the development of the GEC?
All signs point to an increase in GEC demand and supply in the coming years. This would benefit businesses – both electricity generators and enterprises which are end-users of electricity.
Electricity generators
• Higher revenue: As generators increase renewable energy assets and capacity, they can generate more GECs to earn more income and improve their return on investment
• More funds to invest in new renewable assets: With revenue increasing from GEC sales, generators can make further investments in renewables and increase their potential earnings
End users
• Enhance sustainability: For businesses with operations in China, they can reduce their carbon footprint using the GEC, a simple tool which address Scope 2 emissions
• Meet compliance: Companies use GECs to comply with RE100 standards and local laws
• Strengthen competitive edge: Businesses may boost their sustainability credentials and appeal to environmentally-conscious customers
• Support renewable energy development in China: By purchasing and retiring GECs, businesses potentially spur more investment in renewables
• Create a greener future: Businesses can support a cleaner and greener Earth with GECs
The development of the GEC is being shaped by market and non-market forces in China and has extremely high potential to impact the renewable energy landscape in China. Generators and end-users may seize GEC opportunities to meet their economic, social and environmental goals.
In our next blog post, we will explore how businesses may purchase GECs to meet sustainability goals.
Contact us enquiry@redex.eco to find out more about GECs and how we can support your renewable energy journey in China.
Find out how we can support your renewable energy journey in China.
