How to Read China's Electricity Spot Market Prices: Day-Ahead vs Real-Time, Nodal vs Zonal, Price Limits, and How a Contract Settles Against Them

Short answer. A Chinese spot price is a clearing price from one of three markets — day-ahead, intraday or real-time — formed by competition and meant to reflect time and location value. Before reading a number, ask five questions: which market produced it; whether the province uses nodal, zonal or system marginal pricing; which bid and clearing limits applied; how the project's medium/long-term contract settles against it (two methods exist in the national rules); and what sits on top of the energy price in the final bill. The national documents give the mechanics; provincial rules set the values. This guide describes the national layer only and quotes no provincial cap, clearing price or project revenue.

Which market produced the price

NDRC Order No. 20 (2024) divides energy trading by period into medium/long-term trading and spot trading. The Basic Rules for the Electricity Spot Market (Trial) (发改能源规〔2023〕1217号, 7 September 2023) define the spot market as day-ahead, intraday and real-time energy trading by eligible entities, with frequency-regulation and reserve ancillary-service trading run alongside. The Rules apply to provincial and regional spot markets using the centralised model; provinces using a decentralised model and the inter-provincial spot market may write their own rules.

A spot market generally comprises day-ahead, intraday and real-time markets, but each province chooses the actual composition. The day-ahead market is cleared by centralised optimisation to maximise social welfare subject to grid and physical constraints; where no day-ahead market is run, a day-ahead pre-clearing may be published for information but is not a settlement basis. So a "day-ahead price" in a province without a day-ahead market is a forecast, not a settlement price; a published clearing result should contain unit commitment, unit output curves and time-sliced prices, and any out-of-market dispatch or intervention in real time must be recorded and disclosed.

The market also has a stage. Under the Rules a spot market proceeds in order through simulation trial, settlement trial and formal operation; a settlement trial requires a technical support system that has passed third-party verification with the report published, and formal operation requires a complete rule system, risk-control, disclosure and credit systems, and periodic third-party verification. The 2024 disclosure rules add that spot information is not disclosed during non-settlement trial periods, so a price from a simulation period is not a settled price.

Nodal, zonal or system marginal

The Rules allow a choice among three pricing mechanisms. A nodal (locational marginal) price contains an energy component and a congestion component and is preferred where congestion is severe and transmission capacity limited; zonal pricing splits the market at congestion interfaces and is preferred where there are clear interfaces; and a single uniform marginal price may be used as the system price without distinguishing nodes or zones. CNWattHub editorial method: before comparing two provinces' prices, check which mechanism each uses — a nodal price at a congested node and a system marginal price are not the same quantity.

Which limits applied

The Rules require both bid limits and clearing limits (bid limits within the clearing-limit range), allow a secondary price limit after prices sit at a limit for a sustained period (its upper value referenced to long-term average prices and generally below the normal limit), require limits to weigh marginal-unit cost, supply-demand, value of lost load and economic level, require limits to consider fixed-cost recovery where no capacity cost-recovery mechanism exists, and say price caps should rise or hold as trading approaches delivery. The State Council price authority sets the principles for price-limit and price-intervention rules; provincial price authorities write the specific rules into local market rules.

Two later documents move the limits. Document 813 (发改办体改〔2023〕813号, 12 October 2023) says spot clearing price caps should meet the need to encourage flexible sources to generate at peak and link to demand-response prices, and that price floors may reference the local average variable cost of new energy. Document 136 (发改价格〔2025〕136号) says spot price limits should be relaxed, with the bid cap set with reference to local industrial and commercial peak prices and the bid floor with reference to other revenue new energy can earn outside the market, both set by provincial price authorities. Document 196 (发改价格〔2024〕196号) says that where the spot market runs continuously, price limits should be appropriately relaxed so the spot market delivers peak regulation, and peak-regulation, peak-capacity and similar markets stop running.

How a contract settles against the spot price

In spot regions, the Rules require medium/long-term contracts to set a contract curve with time-sliced volumes, time-sliced prices and a settlement reference point. The Rules then offer two wholesale settlement methods: (1) all spot volume is settled at spot prices and the contract volume is settled as the difference between the contract price and the spot price at the reference point; or (2) the contract volume is settled at the contract price plus the spot price difference between the entity's own node or zone and the reference point, with deviations from contract volume settled at spot prices.

Under method 1, in a region with a day-ahead market, the generation-side energy fee equals a day-ahead full-volume fee (Σ day-ahead cleared volume × day-ahead nodal/zonal price) plus a real-time deviation fee (Σ (actual metered export − day-ahead cleared volume) × real-time nodal/zonal price) plus a contract-for-difference fee (Σ contract volume × (contract price − spot price at the reference point)); the reference-point spot price may be the day-ahead or the real-time price. Three things follow for anyone reading a settlement: the contract price does not disappear — it enters through the difference term; the choice of reference point (day-ahead or real-time, and which node or zone) changes the result; and actual output that departs from the day-ahead schedule is priced at the real-time price.

Document 813 requires medium/long-term trading in spot regions to run continuously from D-7 to D-2 before the delivery day, so contract positions can be adjusted up to two days ahead. For new-energy projects, Document 136 defines the "market average trading price" used in mechanism-price settlement as, in regions with a continuously running spot market, in principle the monthly weighted average real-time market price of generation-side projects of the same type. A reader comparing a mechanism-price difference payment with a project's own settlement should therefore expect the two to use different prices: the project settles at its own node or zone; the mechanism uses a same-type monthly average.

What sits on top of the energy price

Under the Rules, generation-side price consists of the energy price plus ancillary-service fees; the price paid by a user trading directly consists of the energy price, the transmission-and-distribution tariff (including cross-subsidy), the grid-side line-loss charge, system operating costs (including ancillary-service fees and pumped-storage capacity fees) and government funds and surcharges; grid-company agency-purchase users do not submit prices in the spot market. Document 1501 (发改价格〔2023〕1501号) converts the single energy tariff of compliant, operating public coal units — captive coal plants, units outside national plans and units failing energy-use, environmental or flexibility requirements are excluded — into a two-part tariff in which the energy price is formed by the market and the capacity price recovers a share of a nationally uniform fixed cost; coal capacity fees are placed in system operating costs and allocated monthly to industrial and commercial users in proportion to consumption. Where the spot market does not run continuously, ancillary-service costs are in principle not passed to the user side.

The Rules allow "daily clearing, monthly settlement" and forbid unbalance-fund pools: every settlement item must be recorded independently and passed through by category, with allocation agreed in advance on the principle that whoever causes a cost pays and whoever benefits bears it. For agency purchase, the grid company forecasts agency-purchase users' consumption and curves and buys through in-market centralised trading to form time-sliced contracts; deviations for agency-purchase industrial and commercial users are settled at spot prices; and new gains or losses from keeping residential and agricultural prices stable are shared by all industrial and commercial users.

Where the spot market stands

The September 2023 NDRC/NEA Q&A said the Rules have 13 chapters and 129 articles plus a glossary, that Shanxi, Gansu, Shandong, western Inner Mongolia and Guangdong had entered uninterrupted settlement trial operation, and described the spot market as a "weather vane" of supply and demand whose short-duration high prices guide thermal units to generate at peak and users to cut demand. Document 813 says markets that have run continuously for more than a year and dispatched and settled on clearing results may move to formal operation after a third-party evaluation and filing with NDRC/NEA; new-energy generators not yet in their local spot market are treated as price-takers in clearing, may be settled under the original price mechanism, but must disclose information and share unbalance costs.

Document 394 (发改办体改〔2025〕394号, 16 April 2025) targets basically full spot-market coverage with continuous settlement by the end of 2025; sets Hubei to enter formal operation by end-June 2025 and Zhejiang by end-2025, with Anhui and Shaanxi striving for end-June 2026; and lists sixteen further provincial markets to start continuous settlement trial operation by end-2025. It also tightens the path to formal operation — more than a year of continuous operation, an independent third-party assessment whose assessor did not draft the local rules or build the technical system and whose report is published, provincial-government approval and NDRC/NEA filing — and requires formal and continuous-settlement provinces to let user-side entities bid, clear and settle in the spot market by end-2025. Document 136 says new energy should participate fairly in the real-time market and move to voluntary participation in the day-ahead market.

The Rules also link spot with ancillary services and capacity: frequency-regulation and reserve markets may clear separately at the start and jointly later; where the energy market fully delivers peak regulation, no parallel peak-regulation product should in principle be kept; ancillary costs are shared by generation and consumption sides; and provinces are to explore market-based capacity compensation and, where conditions allow, a capacity market, aligning price limits, settlement and cost surveys with it.

Reading a settlement statement

The NEA's Basic Rules for Electricity Market Information Disclosure (国能发监管〔2024〕9号, 31 January 2024) cover medium/long-term, spot and ancillary-service markets; information is disclosed on annual, quarterly, monthly, weekly and daily cycles, with forecast-type information before bidding opens and operation-type information the day after the operating day; the 2020 spot disclosure measures were repealed. Market operators must disclose, as public information to the relevant market members, spot and ancillary-service bid and clearing information — per-period total cleared volume, cleared units and volumes by source type, clearing prices, transmission-interface constraints and congestion — and, as specific information to specific market members, settlement information including the daily clearing statement for the spot market; changes to spot information require a published change note. CNWattHub editorial method: reconcile a monthly settlement against the daily clearing statements and the per-period clearing prices for the project's node or zone, and ask the trading centre for its published calculation example before disputing a line.

Scope limits

National rules only. Provincial spot rules, price-limit values, clearing prices and the inter-provincial spot trading rules were not retrieved and are not described. The Rules' article numbering used here follows the 国务院公报 text. Nothing in this guide is a price forecast or investment advice.