How to Read China Electricity Price Forecasts: Which Price Is Being Forecast, the Bands and Limits That Bound It, the Forecast Data Operators Must Disclose, Time-of-Use Ratios, Agency, Mechanism and Capacity Prices, and the 2025–2026 Volume Signals

Short answer. None of the official sources read for this guide publishes a price forecast, so any forecast you are shown comes from outside these texts. What the national texts do give is the frame a forecast has to respect. Coal-fired on-grid prices are formed in a 'benchmark plus float' band of in principle no more than 20% either way (energy-intensive enterprises are not bound by the 20% upward limit), while spot prices are not bound by that band. Spot prices are cleared as nodal, zonal or system marginal prices inside bid and clearing limits whose specific rules the provinces write, with an optional secondary limit. Before bidding opens, market operators must disclose to market members the forecasts a modeller needs (system load, supply-demand balance, tie-line flows, new-energy output by source type and hydro output), although spot-market information is temporarily not disclosed during spot non-settlement trial operation. On the user side, time-of-use ratios are in principle at least 4:1 or 3:1, and the 2021 agency-purchasing notice set monthly grid-agency prices; on the new-energy generation side, volume inside the mechanism is settled for the difference between a mechanism price and a 'market average price'. From 2026 the capacity price recovers a larger share of coal fixed cost, and provinces may then adjust the medium- and long-term coal price floor. This guide shows where each input sits.

1. First question: which price?

A forecast is only readable once you know which of several Chinese prices it describes.

• Coal on-grid price under contracts. Under 发改价格〔2021〕1439号, in principle all coal-fired generation enters the market and its on-grid price is formed within 'benchmark plus float'. The band was widened from up 10% / down 15% to in principle no more than 20% up or down; energy-intensive enterprises are not bound by the 20% upward limit, and spot prices are not bound by the band. The existing coal benchmark remains the reference for new-energy and other prices.
• Spot price. The 2023 spot-market basic rules let each region choose nodal, zonal or system marginal pricing. Nodal prices have an energy component and a congestion component and are preferred where congestion is severe; zonal prices suit regions with clear congestion interfaces. The spot market generally comprises day-ahead, intraday and real-time markets, and the day-ahead market is cleared to maximise social welfare.
• Grid-agency user price. Under 发改办价格〔2021〕809号, for users whose power the grid company buys on their behalf, the price is the agency purchase price (including the average on-grid price and ancillary-service costs) plus the transmission and distribution price (including line loss and cross-subsidy) plus government funds and surcharges.
• New-energy settlement price. Under 发改价格〔2025〕136号 new energy sells in the market, and the volume inside the 'mechanism' is settled outside the market for the difference between a mechanism price and the market average price.

A forecast of "the price in province X" that does not say which of these it means, and for which hours, cannot be checked against anything.

2. The bounds a forecast must respect

The coal band. The band of in principle no more than 20% up or down applies to coal market-trading prices, with energy-intensive enterprises not bound by the 20% upward limit; spot prices are not bound by the band.

Spot limits. The spot market must set a bid price limit and a clearing price limit, with the bid limit inside the clearing-limit range. Limits are to be set considering marginal unit cost, supply-demand, the value of lost load and economic development. Once prices have stayed at the limit for longer than a set time, a secondary limit may apply; its upper value may reference the long-term average price and is generally below the normal limit. Regions without a capacity-cost recovery mechanism should consider fixed-cost recovery in the limit. The State Council's price department sets the principles; provincial price authorities, with other authorities and the NEA dispatched office, write the specific limit and price-intervention rules into the local market rules. CNWattHub reading: a forecast that stays at or above the published limit for long periods without considering the secondary limit has missed a rule.

Medium- and long-term limits moving towards spot. The September 2025 guideline for continuous-spot regions (发改能源〔2025〕1171号) says the state sets medium- and long-term contracting-ratio requirements, and that coal medium- and long-term price limits for monthly and intra-month trades should gradually approach the spot limits, with specifics set by the price authorities.

The floor after the 2026 capacity change. 发改价格〔2026〕114号 raises the share of coal fixed cost recovered through the capacity price to not less than 50%; once that is done, provinces may adjust the floor of in-province coal medium- and long-term prices in light of supply-demand and the variable costs of all market units. It also bars provinces from forcing fixed prices in medium- and long-term contracts and lets them require that a share of annual contract volume carry flexible prices reflecting real-time supply and demand. CNWattHub reading: for a forecaster, more of a coal unit's fixed cost is then recovered through the capacity price rather than the energy price, and the contract-price floor may move with it.

3. The official forecast data you can check a model against

The 2024 Basic Rules for Market Information Disclosure require forecast-type information to be disclosed before bidding opens, and operating information on the day after the operating day; during spot non-settlement trial operation, spot-market information is temporarily not disclosed. Among the 'open' information (公开信息, disclosed to relevant market members rather than to the general public) that market operators must disclose, the parameters include the price limits and the forecasts include system load, supply-demand balance, inter-provincial tie-line curves, total generation, non-market unit output, new-energy output by source type, and hydro output (including pumped storage). Where nodal pricing is used, the operator must publish each node's price for every trading interval with its energy and congestion components.

The spot rules show how these forecasts feed the clearing itself: the day-ahead reliability unit commitment decides which units to start or stop from generator bids, renewable output forecasts, inter-provincial schedules and system load forecasts.

Under 809号 as issued (provisionally valid until 31 December 2022; no later text on its validity was read), for agency users the grid company should in principle publish monthly its forecast of agency users' monthly volume, the deviation between forecast and actual data, the structure and level of purchased volumes and prices, and agency users' price levels and composition. Agency prices are calculated monthly, published 3 days in advance and applied from the next month. CNWattHub reading: the published deviations are a track record against which the grid company's own volume forecasts can be compared.

4. Shape: the time-of-use ratios

发改价格〔2021〕1093号 sets the shape of regulated time-of-use prices. Where the previous or current year's expected maximum system peak-valley difference rate exceeds 40%, the peak-valley price ratio is in principle at least 4:1; elsewhere at least 3:1. A critical-peak price is in principle at least 20% above the peak price; critical-peak hours are set from the hours in which load reached 95% or more of the previous two years' maximum and adjusted flexibly for the year's supply-demand and weather. Where combined heat and power and renewables have a large share and periodic oversupply is pronounced, deep-valley prices may be set on the critical-peak model; seasonal pricing is to be built where load or supply-demand is clearly seasonal, and wet/dry-season (丰枯) pricing where hydro and other renewables have a large share. Where spot markets are not running, medium- and long-term contracts are to declare load curves reflecting time-period prices, with peak-valley spreads in principle not below the catalogue time-of-use spread; contracts that do not declare a load curve or form time-of-use prices are settled at the catalogue time-of-use periods and ratios.

CNWattHub arithmetic, hypothetical prices only: if a valley price were 0.25 yuan/kWh in a province above the 40% threshold, a 4:1 ratio would put the peak price at no less than 1.00 yuan/kWh and a critical-peak price at no less than 1.20 yuan/kWh (1.00 × 1.2). These are illustrations of the ratios, not prices from any province.

5. Agency purchasing and the 1.5× rule

809号 states that it is provisionally valid until 31 December 2022, and no later text on its validity was read for this guide; the rules below are those of 809号 as issued. The NEA still reports grid-agency purchase volumes for 2026, and Fujian's 2026 scheme still covers agency purchasing.

From January 2022 grid companies buy for agency users through centralised trading as price-takers, submitting volumes without prices; agency deviation volumes settle at spot prices where a spot market runs. Users already trading directly who switch to agency purchasing without good reason, agency users with captive coal plants, and energy-intensive users not yet able to trade directly pay 1.5 times the agency purchase price, plus transmission and distribution and funds. CNWattHub reading: under 809号 as issued, a forecast of agency prices rests on a forecast of centralised trading prices, and each month's agency price was to be published 3 days before that month; check the current provincial practice.

6. New energy: mechanism price and 'market average price'

Under 136号, for volume inside the mechanism the grid company settles the difference when the market average price is above or below the mechanism price, and the cost goes into the local system operating cost. Existing projects (in operation before 1 June 2025) keep a mechanism price under current policy, not above the local coal benchmark; solar-thermal projects and competitively allocated offshore wind projects follow current local policy. For incremental projects from 1 June 2025, the mechanism price is formed each year by voluntary bidding: bids are selected from lowest upwards, and the mechanism price is in principle the highest selected bid, not above a bidding ceiling set by the provincial price authority. The 'market average price' is in principle the monthly weighted average real-time generation-side price for the same project type where spot runs continuously, and the weighted generation-side medium- and long-term price for the same project type over active trading periods elsewhere. CNWattHub reading: a new-energy price forecast should therefore say whether it forecasts the market average price (which moves the difference payment) or the project's own capture price.

7. Contracts: how much of the volume is priced in advance

The 2025 medium- and long-term rules state that contract signing should help stabilise market expectations, prevent market risk and secure supply and demand. The NDRC/NEA notice on 2026 contracting is 发改运行〔2025〕1502号; its text was not retrieved here. The Fujian DRC cites it, with 136号, as the basis for Fujian's 2026 scheme, whose price chapter covers bilateral prices, time-of-use policy, agency purchasing and capacity prices; the scheme relaxes the 2026 minimum annual contracting ratios on both sides and moves annual bilateral deals to flexibly agreed time-segment curves. The NEA Southern Regulatory Bureau's notice implementing 1502号 asks generators to bid with regard to fixed costs, fuel costs and supply-demand.

8. Volume and direction signals from the NEA

At its press conference of 30 January 2026 the NEA said 2025 market-traded volume reached 6.64 trillion kWh (up 7.4%), 64.0% of total electricity consumption; that spot markets gave 'high price at peak, low price at valley' signals; and that, with relatively loose supply and demand and lower primary-energy prices in recent years, market prices had gradually fallen and passed through to users.

For January–August 2026 the NEA reported 51,800 亿kWh (5,180.0 TWh) traded through the exchanges, up 19.2%; by trading type, 46,173 亿kWh were medium- and long-term and 5,627 亿kWh spot. The NEA separately reported 2,182 亿kWh of green-power trades (up 6.1%) and 5,638 亿kWh of grid-agency purchases; because medium- and long-term plus spot already equal the 51,800 total (CNWattHub arithmetic), these two figures overlap with them rather than adding to the total. In August alone 7,548 亿kWh were traded, of which 6,819 亿kWh medium- and long-term and 729 亿kWh spot.

CNWattHub arithmetic on those figures: spot was about 10.9% of January–August traded volume (5,627 / 51,800) and medium- and long-term about 89.1% (46,173 / 51,800); in August spot was about 9.7% (729 / 7,548). The NEA release does not state these shares. CNWattHub reading: a forecast that treats the spot price as 'the' price describes the smaller part of traded volume, although where spot runs continuously 136号 in principle uses the monthly weighted average real-time generation-side price for the same project type as the market average price.

Reading table

Checklist

CNWattHub editorial method, not a sourced rule:

1. Ask which price the forecast describes (contract, spot node or zone, agency, mechanism or market average) and for which hours.
2. Check the forecast range against the provincial price limits and any secondary limit in the local rules.
3. Compare the forecaster's load and new-energy assumptions with the operator's disclosed day-ahead forecasts and, for agency prices, the grid company's published forecast deviations.
4. Apply the provincial time-of-use periods and ratios before comparing an hourly forecast with a flat one.
5. For coal from 2026, check whether the forecast moves fixed-cost recovery into the capacity price and whether the province has changed the contract floor.
6. For new energy, separate the market average price from the project's own capture price.
7. Treat any single provincial or national price number as an input to test, not a source; no official forecast is quoted here.

Scope limits

National texts, two NEA releases and two regional or provincial documents only. No price forecast, provincial spot price limit, average spot price, forward curve or agency price is quoted, because none of the sources read states one. The 2026 contracting notice 1502号 is cited only through the documents that cite it. Not investment, trading or regulatory advice.