How to Read China's Electricity-Market Trading Credit Support: the Three Instruments the National Rules Name (Performance Guarantee Letter, Security Deposit, 'Other Settlement Collateral'; Performance Insurance in the Spot Rules), Who Lodges Them (Retailers and New Business Entities), How They Are Drawn (Spot Rules Article 103: Default Notice → Grid Applies → Trading Institution Claims on the Issuer → Suspension and Credit Record; Settlement Rules: Ten Working Days After Invoice for Retailers Without Distribution-Network Operating Rights), How They Cap a Bidder (Bid-Volume Limits Set by Assets, Guarantee Amount and Users' History; Jiangxi's Trial Rule Cancels Eligibility for Non-Lodgement After a Written Reminder), and How the 2026 Draft National Credit Guideline 'May' Scale Them (A-Grade: Amount 'Appropriately' Lowered, Forms Extended; C/D-Grade: Amount 'Appropriately' Raised, No Incremental Insurance; A–D Grades, in Principle Quarterly, From Public Credit, Audited Financials and Trading Conduct)

Short answer. The national market rules read here do not set a guarantee amount; they name the instruments, say who lodges them, and describe how they are drawn. The 2025 medium- and long-term (MLT) market basic rules oblige electricity retailers (售电公司) and new business entities (新型经营主体) to lodge 'a performance guarantee letter, a security deposit or other settlement collateral' with the trading institution, give the grid enterprise the right to apply for their use when a retailer has not paid in full after the deadline, and tie a retailer's bid-volume ceiling to 'total registered assets, the amount of the performance guarantee and the historical consumption of the users it represents'. The 2023 spot rules add performance insurance as a form and write the drawing sequence out in Article 103 — default notice, grid application, claim on the issuer, suspension and a credit record. The 2025 settlement rules say the grid may use the lodged security when a retailer fails to pay, and that payments between a retailer (other than one with distribution-network operating rights) and the grid must clear within 10 working days of the invoice. A provincial rule (Jiangxi, trial 4.0) shows the enforcement end: a retailer or VPP that does not lodge the guarantee or insurance in full, and still refuses after a written reminder, loses its subsequent trading eligibility. And NEA's October 2026 consultation draft of a national credit-evaluation guideline would let the trading institution scale the security to an A–D grade evaluated in principle quarterly: it 'may' appropriately lower the amount and extend the forms for A, and 'may' appropriately raise the amount and refuse incremental performance insurance for C and D. The amounts, formulas and guarantee wording are not in the national texts read here; a province's rules and its trading centre's notices are where to look next.

1. The instruments

CNWattHub reading: the national texts use an open list — 'or other settlement collateral' — so what a given province accepts (cash, bank guarantee, insurance policy, and from which issuers) is a provincial question. The settlement rules call the lodged items '信用担保物', credit security, which is the function: they back the retailer's monthly payment to the grid, not its delivery of energy.

2. Who lodges, and what for

The lodgers in the national rules are retailers and new business entities (新型经营主体); the MLT rules' obligations list for new business entities applies to that class generally, with resource aggregators — VPPs, load aggregators that sign retail or aggregation contracts with dispersed resources — named among them. Generators are not given an equivalent lodging obligation in the clauses quoted here, which place it on retailers and new business entities. The 2020 MLT trading rules — repealed by the 2025 MLT market rules with effect from 2026-03-01 — required all market entities to have good credit and required retailers to publish assets, operating condition and credit commitments on the government-designated site; they are cited here for the lineage of the credit conditions, not as current law. The 2024 registration rules add a gate at entry: entities with relatively serious adverse credit records or past false commitments may register only after repair, and misconduct during registration is entered into trading credit evaluation.

What the security covers is settlement risk. The MLT rules define contract-default risk as non-performance of a signed MLT contract for reasons such as (等) loss of credit, loss of normal performance capacity, a dispute or force majeure; the spot rules define performance risk as non-performance of wholesale and retail contracts for reasons such as loss of credit, disputes or force majeure, 'affecting the normal conduct of market settlement'. A retailer's settlement with the grid is the net of its retail and wholesale positions, and the grid pays or collects monthly.

CNWattHub reading: a reader looking for the credit support behind a generator's offtake will not find it in these clauses; the security described here is the retailer's, lodged for the grid's benefit via the trading institution. The generator's exposure is to the grid enterprise's payment, which the settlement rules address separately (Article 47 permits, where both sides agree, non-cash payment to generators by means such as (等) acceptance bills (承兑汇票) and domestic letters of credit, with the funding cost and payment risk borne in a manner such as buyer-pays-interest, and the scope and proportion of such payment, to be fixed in the purchase contract).

3. The drawing sequence

The spot rules give the clearest procedure (Article 103):

1. The entity misses the payment deadline; the grid enterprise informs the trading institution, which issues a default notice.
2. The grid enterprise applies 'as soon as possible' to use the guarantee or insurance for the default amount.
3. The trading institution serves the claim notice and the original guarantee on the issuing institution and demands payment.
4. The grid's total payments to the entity may not exceed actual receipts plus the amount drawn.
5. The trading institution serves an execution notice, a suspension-of-trading notice, and makes a credit record.

The division of labour is fixed elsewhere in the same rules: the trading institution 'manages performance guarantees', the grid dunns and applies. The MLT rules and settlement rules repeat the grid's right to apply after a missed deadline, and the settlement rules set the payment clock for retailers without distribution-network operating rights — no later than 10 working days after the invoice.

CNWattHub reading: the sequence makes the trading institution the keeper and claimant of the instrument and the grid the beneficiary in substance; a guarantee's wording should match that (beneficiary, who may call, on what notice). Step 4 is a cap on the grid's exposure, not a cap on the retailer's liability. Suspension and the credit record are automatic consequences of a draw under the text, which connects to the exit grounds: a credit evaluation 'lowered to a level unsuitable for continued participation' is a ground for compulsory removal.

4. The bid-limit link

The MLT rules make the security a determinant of how much a retailer may bid: the bid-volume ceiling for retailers, VPPs and load aggregators 'shall be determined according to risk-absorbing capacity conditions such as total registered assets, the amount of the performance guarantee and the historical consumption of the users represented or aggregated'. Jiangxi's trial rules apply it: a retailer's bid quota must also satisfy the guarantee (insurance) amount and an annual-sales quota tied to total assets; for retailers and VPPs, non-lodgement that persists after a written reminder cancels subsequent trading eligibility. The Southern regulatory bureau's December 2025 notice asks trading institutions to assess retailer performance risk, refine risk-exposure models where necessary and monitor exposure daily.

CNWattHub reading: the security is therefore not only a backstop but one of the conditions on which a retailer's bid ceiling is set — alongside registered assets and users' history — so a retailer's book and its guarantee are linked, though the national text names factors, not a ratio or a formula. Daily exposure monitoring means a retailer's position is tracked against its security day by day; the notice asks for exposure models to be refined 'where necessary' and does not prescribe the model, so how a province values the exposure is not stated in the texts read here.

5. The coming credit grade

The State Council's 2026 implementing opinion calls for a unified electricity-market credit system — a unified information catalogue, evaluation standards and 'list of application measures'. Its companion scheme for enterprise credit (国办发〔2026〕8号) separates public credit evaluation (by government; graded in principle A–D; re-evaluated at most a year apart) from market-based evaluation by third parties, and says localities in principle may not run their own sector evaluations without the regulator's unified rules (if genuinely needed, their rules must be approved by the sector regulator). NEA's draft guideline (consultation notice dated 2026-10-13; comments within 30 days of issue) is the sector rule:

CNWattHub reading: the draft turns credit support from a flat requirement into a graded one; the words are 'may' (可) and 'appropriately' (适当), so the amounts remain for the trading institution and provincial rules to set. The exclusion of insurance as incremental security for C/D grades is the one restriction on form among the measures the trading institution 'may' take. Because financial inputs come from the audited report and a missing item scores zero, a retailer's accounts become part of its security cost. The draft is a consultation text with no effective date; a reader should check whether and in what form it was issued.

6. The supervision frame

The 2024 market-operation rules require risk-prevention mechanisms and place monitoring on market operators under 'whoever operates prevents, whoever operates monitors'; NEA's November 2024 notice reports that supervision found rule breaches and bid collusion and requires half-yearly monitoring reports. The Southern bureau's 2025 notice prohibits 'yin-yang' contracts that fabricate goods or inflate amounts.

7. A reading sequence

1. Instrument. Which of the named forms the province accepts, from which issuers, and whether insurance is admitted.
2. Beneficiary and claimant. Trading institution as keeper and claimant, grid as beneficiary; wording to match Article 103.
3. Clock. 10 working days after invoice (retailers without distribution-network operating rights); default notice; suspension.
4. Volume link. Assets, guarantee amount, users' history; the provincial formula.
5. Credit grade. Current provincial evaluation and the draft national A–D scheme's possible effect on amount and form.
6. Exit. Non-lodgement after a written reminder (Jiangxi), credit downgrade and refusal to rectify as grounds for loss of eligibility or removal.

Scope limits

This guide reads the 2025 MLT market basic rules, the 2023 spot-market basic rules, the 2025 metering-and-settlement rules, the 2024 registration rules, the 2020 MLT trading rules, the 2024 market-operation rules, NEA's 2024 conduct notice, 国办发〔2026〕4号 and 8号, NEA's October 2026 consultation draft credit guideline, Jiangxi's trial rules 4.0 and the Southern bureau's December 2025 notice. It quotes no provincial formula for guarantee amounts, no bank guarantee or insurance wording, no risk-exposure model and no case of a draw; the national guideline is a draft without an effective date. Not legal, trading or investment advice.