How to Read China's Electricity Market Trading Rules: The 1+N Basic Rules, Registration, Medium/Long-Term and Green-Power Trading, Checks, Settlement Calendar and Supervision

Short answer. China's electricity market now runs on one umbrella rule — NDRC Order No. 20 of 2024, the Basic Rules for Electricity Market Operation — and a set of nationally uniform "basic rules" beneath it covering registration, medium/long-term trading, spot trading, ancillary services, metering and settlement, and information disclosure, which the NEA described as a "1+N" system. Provincial and regional implementing rules sit below those. This guide reads the national layer in the order a market participant meets it: who may trade, what is traded and at what price, how a bid becomes a contract, how the contract is metered and settled, and who supervises. It quotes no provincial rule, price limit or traded price.

1. The umbrella: Order No. 20

The Basic Rules for Electricity Market Operation were adopted on 18 April 2024, promulgated on 25 April 2024 and took effect on 1 July 2024, replacing the 2005 rules; they apply to all types of electricity market and define three groups of market members — operating entities (generators, power-selling enterprises, users and new-type entities such as storage, virtual power plants and load aggregators), market operating institutions (trading centres and dispatch bodies) and grid companies. The rules establish a registration system run by trading centres, name three trading types (energy, ancillary services and capacity), divide energy trading by period into medium/long-term and spot, and set the settlement division of labour: the trading centre produces the settlement basis and the grid company settles on entities' behalf.

In September 2024 the NEA said this revised Order No. 20 forms the "1" of the national unified market's "1+N" basic-rule system, that the new Registration Rules joined the medium/long-term, spot and disclosure basic rules as nationally uniform rules, and that registered operating entities had grown from 42,000 in 2016 to 743,000. By December 2025 the NEA was describing a "1+6" basic-rule system in which the revised medium/long-term rules absorbed the former green-power trading chapter and dropped registration, disclosure and settlement content that other basic rules already cover.

2. Who may trade: the Registration Rules and the retailer rules

The Basic Rules for Electricity Market Registration (国能发监管规〔2024〕76号, 13 September 2024, valid five years) cover the medium/long-term, spot and ancillary-service markets and eight entity types; registration runs through application, commitment, review, public notice and effect; the trading centre reviews within 5 working days with a one-time notice of deficiencies; generators, users, new storage, distributed generation and EV-charging operators in principle need no public notice; information changes must be filed within 5 working days and trading continues during a change; and an entity may in principle hold a service relationship with only one retailer or virtual power plant per contract period. A generator must hold project approval or filing and must hold a generation licence, be in the process of obtaining one within the prescribed time limit, or be exempt from it; it must have a signed dispatch agreement and a connection to the dispatch automation system, and metering adequate for settlement; a new-type storage enterprise needs the same dispatch agreement and automation link, time-sliced metering, and must meet technical conditions on maximum charge/discharge power, regulating capacity and duration — a co-located storage unit is treated as one with its owner but may, with independent metering and control and legal-person status, convert to an independent project.

Retailers follow the separate Measures for the Administration of Power-Selling Companies (发改体改规〔2021〕1595号, 11 November 2021, valid five years): total assets of at least 20 million yuan, with 20–100 million allowing up to 3 TWh of annual sales, 100–200 million up to 6 TWh and 200 million or more unlimited; at least 10 full-time professionals; a one-month public notice after which, if no objection is raised, registration takes effect automatically; a performance guarantee equal to the larger of two amounts — at least 0.8 fen/kWh on the past 12 months' wholesale volume, or at least 5 fen/kWh on the larger of the past two months' wholesale or retail volume — which spot-market regions may raise; and a rule that a user may have only one retailer per contract period and buys all its volume through it.

3. What is traded and at what price: the 2025 medium/long-term rules

The Basic Rules for the Medium/Long-Term Electricity Market (发改能源规〔2025〕1656号) were issued on 17 December 2025 as a revision of the 2020 trading rules, take effect on 1 March 2026 for five years, repeal the 2020 rules and the 2024 green-power trading chapter, and require local implementing rules to be filed by 1 March 2026; they define medium/long-term trading as trades for delivery in a future period across multi-year, annual, monthly and intra-month (ten-day, weekly, multi-day) horizons, and say a user participating directly buys all its volume in either the wholesale or the retail market, never both, while users not yet participating are supplied through grid-company agency purchase and may opt in from the following month. The NEA's Q&A puts medium/long-term trading at 95.9% of total market traded volume in the first three quarters of 2025 and says the revision pushes trading toward both longer (multi-year) and shorter (daily continuous) periods.

Multi-year, annual and monthly trades open periodically (continuous opening may be explored) while intra-month trades in principle open continuously by day; time-sliced volumes and prices are formed by agreement or competition; trading modes are centralised (centralised bidding, rolling matching, listing) and bilateral; unfulfilled contracts may be transferred wholly or partly to a third party with their rights and obligations; and an entity may only buy or sell in the same trading sequence and period.

Green-power trading is a product in its own right: its object is green electricity plus its environmental value, delivered with state-issued green certificates; the price is the energy price plus the environmental value, each stated separately; the environmental value is excluded from time-of-use and power-factor charge calculations; a contract must state volume, curve and both price components, and the trading centre builds the traceability relationship; the two components are settled separately, volumes under the sustainable-development price settlement mechanism do not earn certificate revenue twice, and the volume on which the environmental value is settled is the smallest of the monthly contract volume, the generation-side export net of mechanism volume, and the user-side volume, with deviation compensation as agreed in the contract.

On price, the State Council price authority sets the overall principles and provincial price authorities (with energy, power-operation and regulatory bodies) write the settlement-price implementing rules; apart from government-priced volume, prices are formed by the entities without third-party interference; contracts may carry fixed prices or flexible mechanisms tied to supply-demand and generation cost; bid and clearing caps and floors are set by the government price authority together with the energy, power-operation and regulatory bodies to prevent manipulation and predatory competition, with the market management committee and entities able to make suggestions; and limits on intra-month trades are to move gradually toward spot limits.

4. From bid to contract: windows, limits and checks

The trading centre publishes a monthly trading calendar; trading notices listing product, participants, mode, bid window, delivery period, parameters, clearing method and constraints go out, in principle, at least 3 working days before bidding for multi-year and annual trades and at least 1 working day for monthly trades, with none for continuous trading; key parameters may not be changed or added during bidding and clearing; the dispatch body publishes and updates available transmission capacity and security constraints; each generator's bid limit is published at least 1 working day before bidding; and limits for retailers, virtual power plants and load aggregators are set from registered assets, performance-guarantee amounts and the historical consumption of the users they represent.

After bidding, two checks follow: a clearing check by the trading centre (volume and price limits; in principle no more than 1 working day) and a grid-security check by the dispatch body (5 working days for multi-year and annual trades, 2 for monthly, 1 for intra-month); if the security check fails, the dispatch body pushes the overload information and the trading centre cuts trades in reverse priority order within the same time limits; results are published within 1 working day, objections must be raised within 1 working day and are answered within 1 working day, and if no objection is raised in time the platform auto-confirms; and the trading centre's electronic confirmation counts as an electronic contract. CNWattHub editorial method: before trading, obtain from the trading centre the local implementing rules (实施细则) and the current monthly calendar, because the priority order used in the cut-back and the actual windows are written there, not in the national text.

5. How the contract meets the spot market

Medium/long-term trades settle on a calendar-month cycle with daily clearing and monthly settlement; a settlement reference point serves as the delivery point of contract volume in the spot market, priced at day-ahead or real-time clearing prices; settlement may be by price difference or volume difference; registered entities without contracts have their actual generation or consumption settled as deviation volume; residential/agricultural and agency-purchase deviations are settled separately; and in an emergency the dispatch body may dispatch on a safety-first basis with after-the-fact reporting and disclosure. The 2023 spot rules define the spot market as day-ahead, intraday and real-time energy trading whose clearing prices reflect time and location value, and offer the two wholesale settlement methods that the reference point serves: all spot volume at spot prices with contracts settled as the difference between contract price and reference-point spot price, or contract volume at contract price plus the spot price difference between the entity's node or zone and the reference point, with deviations at spot prices.

Ancillary services sit beside the energy market under the Basic Rules for the Ancillary-Service Market (发改能源规〔2025〕411号, 3 April 2025), which define ancillary services as peak regulation, frequency regulation, reserve, ramping and similar services from adjustable resources, apply the principle "whoever provides earns, whoever benefits pays", make the dispatch body the buyer that states needs, organises trading, clears, calls services and calculates fees, and have operating entities earn ancillary revenue and bear cost allocation.

In April 2026 the NDRC General Office and NEA General Department approved in principle State Grid's revised Inter-Provincial Spot Trading Rules (发改办体改〔2026〕275号), asking for linkage with cross-grid-area trading, the inter-provincial medium/long-term market and provincial spot markets and for a study of direct user-side participation; the rules define inter-provincial spot trading as day-ahead and intraday energy trading using residual inter-provincial capacity after inter-provincial medium/long-term trades, as physical trades organised by the national and regional dispatch centres within the State Grid and Inner Mongolia Power coverage area. One province is generally one trading node (several where severe congestion recurs); entities in the same province (other than units consumed across provinces) may not trade with each other; paths chain inter-provincial AC/DC corridors and key intra-provincial corridors, lowest transmission price (including losses) first; clearing is centralised bidding in which buyers' time-sliced curves are converted to the seller's node net of transmission price and losses, sellers rank ascending and converted buyer prices descending, pairs clear in decreasing order of price difference until the difference is below zero or path capacity is exhausted, the seller-node price is the average of the last matched pair, and the buyer-node price adds transmission price and losses. The day-ahead market covers the next 24 hours in 96 fifteen-minute periods; the national dispatch centre compiles the D-day pre-plan on D-2; bids are curves of at most 5 segments per period, non-decreasing for sellers and non-increasing for buyers, in units of 1 MW and 1 yuan/MWh; the floor references the lowest provincial spot bid floor of the previous year across covered provinces and the cap twice the highest provincial bid cap; and sellers bid at the export side while buyers bid at the receiving side.

6. Metering and the settlement calendar

The Basic Rules for Electricity Market Metering and Settlement (发改能源规〔2025〕976号, 18 July 2025) took effect on 1 October 2025 for five years; they distinguish forming the settlement basis (trading centre) from bill settlement (grid company on entities' behalf); settlement is in principle monthly; units are MWh to three decimals or kWh in integers, yuan to two decimals and yuan/MWh to three decimals (or yuan/kWh to six); no unbalance fund pool may be set up and each item must be recorded and passed through separately; and compensation, assessment, balancing or adjustment charges arising from system security, market order, market design or congestion must have their allocation method fixed in advance and disclosed.

The monthly calendar is written into the rules: the dispatch body pushes ancillary-service charges by the 3rd working day; the trading centre issues the previous month's draft settlement basis by the 5th working day and entities and grid companies have 1 working day to check and object (silence counts as confirmation; disputes roll to the next period without blocking undisputed amounts); the formal basis follows by the 8th working day; grid companies in principle issue bills by the 10th working day (regions with the conditions may optimise the timing); a generator in principle invoices within 5 working days of the bill and is paid in full within 5 working days of invoicing (or, by agreement, at least 50% within 5 and the rest within 10 working days); grid companies may not withhold generators' payments because of user-side arrears; retroactive corrections are in principle limited to 12 months; and settlement queries may be raised within 15 working days.

Disclosure runs under the NEA's 2024 Basic Rules for Electricity Market Information Disclosure, which cover the medium/long-term, spot and ancillary-service markets on annual, quarterly, monthly, weekly and daily cycles, with forecast-type information released before bidding opens and operation-type information the day after the operating day. The 2025 medium/long-term rules repeat the annual-to-daily cycles, require disclosed information to stay available or queryable for at least 2 years and to be sealed for 5 years, and defer the rest to the disclosure rules.

7. Who supervises and when a market can be stopped

The Measures for Electricity Market Supervision (NDRC Order No. 18, adopted 8 April 2024, promulgated 12 April 2024, in force 1 June 2024, replacing the 2005 measures) make the NEA and its dispatched offices the regulator; define the operating rules as the basic rules plus supporting rules on access registration, trading organisation, metering and settlement, credit management and disclosure; require registration before trading; let market operators intervene (publishing the reason) when supply is insufficient, a major accident threatens the grid, technical systems fail or a suspension is ordered; let local government departments or the regulator suspend a market for listed reasons including collusion that seriously affects results; route trading disputes to the regulator; and record non-performance, price manipulation through market dominance and disclosure failures in the credit system.

Reading checklist

Scope limits

National basic rules only. Provincial and regional implementing rules — which carry the actual price limits, priority orders and assessment tariffs — were not retrieved. The NEA Q&A figures (95.9%, 743,000) are the NEA's own statements. The 2024 disclosure rules are cited from their .doc attachment, whose article numbers do not survive text extraction. Not legal or trading advice.