How to Read China's Electricity Market Settlement: the 2025 Metering and Settlement Rules (Settlement Basis vs Bill, 'Daily Clearing, Monthly Settlement' in Principle Where Spot Runs Continuously, the 5th/8th/10th Working-Day Timetable with Bills in Principle by the 10th, Payment in Principle Within 5 Working Days of Invoice, a Correction Look-Back in Principle of No More Than 12 Months), the Two Spot Settlement Methods, Medium/Long-Term Reference Points and the Document 136 Difference Settlement

Short answer. Since 1 October 2025 China has one national rule for how market electricity is metered and settled: the 电力市场计量结算基本规则 (发改能源规〔2025〕976号), valid for five years. It splits settlement into two steps — the trading centre forms the settlement basis (结算依据) and the grid company, entrusted by the market participant, calculates the charges, issues the bill (电费账单) and collects or pays — and it applies to the metering and settlement of every type of electricity market. Settlement is in principle monthly; where the spot market runs continuously it is in principle 'daily clearing, monthly settlement'. The rules set a timetable (areas with the conditions may optimise it): check version of the settlement basis by the 5th working day, formal basis by the 8th, bills in principle by the 10th. Generators are paid in principle within 5 working days of invoicing; retailers settle the retail–wholesale difference within 10 working days; corrections look back in principle at most 12 months; a participant has 15 working days to query a basis or bill. What the numbers on the bill are comes from the market rules underneath: the two wholesale settlement methods of the 2023 spot rules, the settlement reference point and separate green-value settlement of the 2025 medium/long-term rules, and the Document 136 difference settlement for new energy. This guide reads those texts in that order.

1. Two steps, two documents, two parties

The 2025 rules define settlement as 'forming the settlement basis' plus 'charge settlement'. The trading centre provides the settlement basis and related services to participants and grid companies; the grid company, entrusted by participants, calculates their charges according to policy documents and the settlement basis. This is consistent with NDRC Order No. 20 (2024), under which the grid company and dispatch centre supply data to the trading centre, the trading centre provides the settlement basis, and the grid company provides settlement services on the participants' behalf. NEA's Q&A on the rules adds that they are the first basic rule to assign the grid company a duty to check the settlement basis, and the first to specify user-side payment flows at basic-rule level.

Three design rules follow:

• Scope. Settlement covers energy, ancillary-service and capacity transactions; the practical terms of charge settlement go into the settlement agreement (电费结算协议) between users, retailers, generators and the grid company; and, apart from national policy, the settlement step may not change key elements such as clearing results or contract volumes and prices.
• Unit of settlement. Virtual power plants, new-type storage and other new-type participants follow the rules, and settlement is done per market participant.
• No hidden pools. Settlement items must be calculated and listed separately, and no unbalanced-funds pool may be created.

The rules also fix units and precision — in principle energy in MWh to three decimals or kWh to the integer, charges in yuan to two decimals, prices in yuan/MWh to three decimals or yuan/kWh to six.

Who is outside: in a May 2026 reply to a public enquiry, NEA's market regulation department said residential electricity is supplied by grid companies and has not entered the market, so the rules do not apply to residential (including household) metering and settlement.

2. Where the meter sits

Metering devices must be installed at the ownership demarcation point. Where that is impossible, the grid company agrees the location with the participant, determines the transformer and line losses and the gateway metering points used for settlement, and writes them into the purchase/sale or supply contract. Order No. 20 puts the principle more bluntly: the energy metered at the legal or agreed metering point is the basis for settlement, and the participant bears losses on its side of the point unless the state provides otherwise. A participant may ask for a device check; if the error exceeds the specified accuracy the device owner pays, otherwise the applicant does.

3. The monthly clock

Areas with the conditions may further optimise the time points and flows. NEA's Q&A explains why the clock exists: settlement timing used to be set locally, some areas settled late and in individual areas it took up to a month.

Two protections for generators are written in. The grid company may not stop or reduce payment to generators because user-side parties are in arrears, and late payment (force majeure excepted) carries agreed liquidated damages. On the other hand, by mutual agreement the grid company may pay generators with bank acceptance bills or domestic letters of credit, provided the purchase/sale contract states who bears the funding cost and the scope and share of such non-cash payment — a clause worth reading before signing.

Retailers without a distribution network settle the difference between their retail and wholesale charges; if a retailer fails to pay in full and on time, the grid company may use its performance guarantee, deposit or other settlement collateral.

4. Corrections, clearing and disputes

The rules separate two kinds of re-calculation. 追退补 (corrections) recalculate already-settled volumes and charges because of participant causes, data anomalies or other permitted cases, with a look-back period in principle of no more than 12 months. 清算 (clearing) recalculates because of policy or rule changes. A participant may raise an enquiry within 15 working days of the basis or bill; the trading centre or grid company assesses it within 5 working days and, if substantiated, corrects it in the next cycle that meets the settlement conditions. Disputes may be mediated by the market management committee, the price authority or the electricity regulator, and otherwise go to arbitration or the courts. The 2023 spot rules add a window for dispute mediation applications: an application about clearing prices or volumes/amounts in the settlement basis must be made in writing within 10 working days of the market operator's reply to an enquiry, and one about the bill within 10 working days of the grid company's reply.

5. What the numbers mean: spot

The 2025 rules govern how settlement runs; the market rules govern what is settled. The 2023 spot market basic rules give two wholesale settlement methods. Method one: all spot energy is settled at spot prices, and medium/long-term contract volumes are settled on the difference between the contract price and the spot price at the settlement reference point. Method two: contract volumes are settled at the contract price plus the spot difference between the participant's node or zone and the reference point, and the deviation between actual and contract volumes is settled at spot prices. Both are 'daily clearing, monthly settlement' where adopted, which the 2025 rules now make the default wherever the spot market runs continuously.

The spot rules also list what a bill contains. A user-side bill: energy charges, transmission and distribution price, line-loss charges, system operation charges, government funds and surcharges. A generator-side bill: energy charges for spot and medium/long-term trades, system operation charges and cost-compensation items. CNWattHub reading: when a buyer compares two provincial bills, the 'system operation charge' line is where capacity charges and ancillary-service costs usually appear, and it is the line most likely to differ.

6. What the numbers mean: medium/long-term and green power

The 2025 medium/long-term market rules settle in principle by calendar month with daily clearing; they require a medium/long-term settlement reference point as the delivery point of contract energy in the spot market, whose price may be determined by day-ahead or real-time clearing; they allow difference-price or difference-volume settlement; a registered participant without contracts is settled on its deviation volume; and residential/agricultural and grid agency-purchase deviation volumes are settled separately.

For green power the energy and the environmental value are settled separately. Volumes under the sustainable-development price settlement mechanism do not also receive green-certificate income, and the environmental-value volume is the smallest of monthly contract volume, generation-side on-grid volume (net of mechanism volume) and user-side volume, with deviation compensation as contracted.

7. New energy: the Document 136 difference settlement

Document 136 (2025) creates a difference settlement outside the market for new energy. For volume included in the mechanism, the part by which the market average price is below or above the mechanism price is settled by the grid company as a difference, and the cost is included in local system operation charges; the grid company runs this difference settlement each month at the mechanism price. CNWattHub reading: a wind or solar owner therefore sees two settlement streams on different clocks. Market energy is settled at market prices under the methods above and within the time limits of the 2025 settlement rules; the difference line for mechanism volume is settled monthly under Document 136. The exact billing and payment dates for the difference line should be checked against the provincial implementing rules.

8. Agency purchase and ancillary services

Document 1439 (2021) required localities to push all commercial and industrial users into the market in an orderly way (users at 10 kV and above all to enter, others as soon as possible), abolished their catalogue sales prices, and had the grid company purchase on behalf of users not yet buying directly, with the agency price formed mainly through centralised bidding or competitive tendering and at least one month's notice before the first agency sale; users who left the market and returned to agency purchase pay 1.5 times the agency price. The medium/long-term rules now require agency-purchase deviation volumes to be settled separately from those of residential and agricultural users.

Under the 2025 ancillary-service market rules, where the spot market is not running continuously ancillary-service costs are in principle not passed to the user side; where it runs continuously, qualifying frequency-regulation and reserve costs are in principle shared by user consumption and by on-grid energy that did not take part in the energy market, in a ratio set by the provincial price authority; independent storage and virtual power plants share or receive these costs by their on-grid (off-take) energy in each settlement period. In the 2025 settlement rules, ancillary-service charges are one of the three categories of settlement (with energy and capacity).

Reading table

Checklist

1. Confirm that the settlement agreement with the grid company names the metering point, losses and any non-cash payment terms.
2. Diarise the 5th/8th/10th working days and the one-day confirmation window; silence confirms.
3. Invoice in principle within 5 working days of the confirmed bill; the payment clock runs from the invoice.
4. Check which spot settlement method the province uses and where the reference point is.
5. Separate green energy from green value, and mechanism volume from market volume.
6. Query within 15 working days; apply for dispute mediation in writing within 10 working days of a reply.

Scope limits

This guide reads national texts only: the 2025 settlement rules, NEA's Q&A and one 2026 reply, Order No. 20, the 2023 spot rules, the 2025 medium/long-term and ancillary-service rules, Document 136 and Document 1439. It does not quote any provincial settlement implementation rule, any price, any bill or any court decision. Where the rules say 'in principle' (原则上) or 'conditions permitting' (条件具备的地区), provinces may differ, and the texts say so.