How to Read China's Electricity Market Credit Risk: NEA's Draft National Credit Evaluation Guideline (October 2026; A/B/C/D Grades, an In-Principle Quarterly Cycle, Guarantee Amounts That May Be Lowered or Raised by Grade), the 2026 State Council Opinions, Retailer Performance Guarantees (the Larger of Two Floors: 0.8 fen/kWh of 12-Month Wholesale Volume or 5 fen/kWh of the Larger Two-Month Wholesale/Retail Volume), and How Default Is Handled Under the Spot, Medium/Long-Term and Settlement Rules

Short answer. Credit risk in China's electricity market has three layers of rules in 2026. First, the State Council General Office's February 2026 opinion on the national unified market asks for a unified electricity market credit system — one information catalogue, one evaluation standard, one list of application measures — and encourages trading centres, associations and third-party agencies to rate generators, retailers, users and new-type participants against it. Second, NEA published a consultation draft of that guideline on 13 October 2026 (comments within 30 days): it would apply to all participants registered in the national unified market, including new-type storage and virtual power plants, grade them A/B/C/D on a 100-point score — A above 85, B above 70, C above 40, D at 40 or below or on the serious-dishonesty list — in principle every quarter, and let trading centres lower performance-guarantee amounts for A-rated entities and raise them (with no incremental guarantee in insurance form) for C and D. The draft is not in force; its effective date is blank. Third, the operative rules already in force: the 2021 retailer management measures set performance-guarantee floors (the larger of 0.8 fen/kWh of the past 12 months' wholesale volume or 5 fen/kWh of the larger of the wholesale and retail volumes within the past two months) and a removal procedure for retailers that do not top up, and the spot, medium/long-term and settlement rules say when a guarantee is drawn and a default recorded. This guide reads those texts; it quotes no provincial rule, rating or default statistic.

1. The 2026 policy frame

The February 2026 State Council General Office opinion (国办发〔2026〕4号) contains the credit item that the NEA draft implements: a unified electricity market credit system with a unified credit information catalogue, evaluation standard and list of application measures, unified collection and sharing of credit information, and credit evaluation of generators, retailers, users and new-type participants by trading centres, industry associations and third-party credit service agencies under departmental guidance. Around it sit four related asks: incentive and constraint measures for signing and performing medium/long-term contracts, with participants in spot markets having to meet national security-of-supply signing and performance ratios; a national unified settlement policy and market price risk-prevention system; whole-process supervision, disclosure and risk control of the retail market with a revision of the retail company management measures; and an emergency-handling system defining when regulators may authorise market operators to intervene.

The April 2026 plan on enterprise credit evaluation (国办发〔2026〕8号) supplies the architecture: public credit evaluation by government (compliance with laws and regulations) versus market-based evaluation by credit-reporting agencies, rating agencies and associations (default risk in market activities); public results in principle graded A/B/C/D; at most one year between two evaluations of the same entity; and localities may not in principle run their own industry credit evaluations where the industry department has issued no unified rules. The plan also fixes the cross-link that reappears in the electricity draft: an enterprise rated D in the public comprehensive evaluation may not be rated A in an industry evaluation.

2. The NEA consultation draft (October 2026)

CNWattHub reading: for a counterparty review the two draft mechanics that matter most are the guarantee lever (an amount that may be lowered for A, and raised for C/D with no incremental guarantee in insurance form) and the in-principle quarterly refresh with a drop to D within 5 working days of the trading centre obtaining new serious-dishonesty list information. Both are still draft wording and may change.

3. What is already in force: registration and the retailer guarantee

The 2024 registration rules already bar an entity with a relatively serious bad credit record or past false commitments from registering until the record is repaired, and send violations and dishonesty during registration into the trading credit evaluation with possible dishonesty management.

The 2021 retail company management measures are the operative collateral rule. Before trading, a retailer lodges a performance guarantee (bank guarantee or performance insurance) equal to the larger of two figures: the past 12 months' wholesale volume at not less than 0.8 fen/kWh, or the larger of the wholesale and retail trading volumes within the past two months at not less than 5 fen/kWh; spot-market areas may raise the standard; a separate guarantee is needed in each province; the beneficiary is the grid company that signs the settlement agreement; and the guarantee may be drawn when the retailer fails to pay settlement charges, after public notice of the arrears. A tracking and warning mechanism monitors the guarantee against exposure (daily during spot settlement trial operation, weekly otherwise); the retailer has 3 working days to top up after notice; and a retailer that still refuses after written reminder loses further trading qualification, is published on the trading platform and 信用中国, sees dishonesty sanctions applied to its legal representative and natural-person shareholders after publication, and has its unperformed contracts transferred to other retailers.

CNWattHub arithmetic on the floor, for illustration only: a retailer with 1 TWh of wholesale volume in the past 12 months would need at least 1,000,000,000 kWh × 0.008 yuan = 8 million yuan under the first leg; the second leg (5 fen/kWh on the larger of the wholesale and retail volumes within the past two months) can be higher for a book that is large in either market.

4. Drawing the guarantee and recording the default

5. A reading sequence for a counterparty file

CNWattHub's reading of the sources as a checklist:

1. Registration status and record. Any bad credit record or false commitment at registration, and whether it has been repaired.
2. Guarantee adequacy. The guarantee amount against the two statutory floors, any higher provincial standard, and whether it is lodged in every province where the retailer trades.
3. Top-up history. Whether the retailer has received top-up notices and met the 3-working-day deadline.
4. Draw history. Whether a grid company has drawn on the guarantee, deposit or other collateral under the settlement rules, and whether a default notice, execution notice or trading suspension has been issued under the spot rules.
5. Declaration limits. For retailers, virtual power plants and aggregators, the limit set from assets, guarantee and represented load.
6. Future grade. Once the guideline is issued, the entity's A/B/C/D grade, the date of the last (in principle quarterly) evaluation and whether its public comprehensive rating is D.

Scope limits

This guide reads two State Council General Office documents of 2026, NEA's consultation draft and the national basic rules; it quotes no provincial implementation rule, no trading-centre credit report, no actual grade, guarantee amount or default case, and no court or arbitration decision. The draft guideline's wording, thresholds and dates may change before issue.