How to Read China's Wind Power Curtailment Compensation Rules: Guaranteed Purchase under the Renewable Energy Law, NDRC Order No. 15 (2024), the 2016 Compensation Mechanics, How Curtailed Energy Is Measured, and the 'In Principle Not Below 90%' Relaxed Target for Good-Resource Regions

Short answer. China has a legal duty of full guaranteed purchase: grid companies must buy, in full, the grid-connected output of compliant renewable projects, and a grid company that fails to do so and causes loss is liable for compensation, is ordered to correct and, if it refuses, faces a fine of up to one times the loss. But the duty has a defined scope. NDRC Order No. 15 (2024) splits output into guaranteed-purchase electricity and market-traded electricity, and excludes from the guarantee any shortfall caused by the generator itself, grid security constraints, grid maintenance, market bids or force majeure. Among the national texts retrieved, the one that spells out who pays for curtailment within the guaranteed volume is the 2016 Measures: crowding-out conventional units pay; the grid company pays for connection-line faults (except force majeure beyond design standards) and unplanned maintenance; and the project bears resource shortfalls and its own faults. Curtailed energy is measured under NEA's 2022 rules (mainly by the nacelle-wind-speed method) and disclosed monthly, with a dispute route. Provinces set utilisation targets, which regions with good resources may relax to, in principle, not below 90%; national wind utilisation was 94% in 2025 and 91.4% in the first quarter of 2026. Since Document 136 (2025) new-energy output in principle all enters the market, with a difference settlement outside the market for mechanism volumes. This guide explains how to read the layers.

1. The legal duty and its remedy

Article 14 of the Renewable Energy Law establishes the full guaranteed purchase system: grid companies must sign connection agreements with renewable generators built under the development plan and licensed or filed, and purchase in full the grid-connected output that meets connection standards within their coverage; generators must cooperate on grid safety. Article 29 makes a grid company that fails to purchase as required liable for the generator's economic loss, ordered to correct by the regulator, with a fine of up to one times the loss if it refuses.

Order No. 15 (in force 1 April 2024) repeats the liability at regulatory level and lists the triggering conduct: failing to build or complete connection works, refusing contracts, failing to provide connection service, failing to dispatch renewables with priority, or any other grid-, dispatch- or trading-caused shortfall. CNWattHub reading: the remedy is loss-based and fault-based. Curtailment ordered for a listed non-fault reason is not, on these texts, a compensable breach.

2. What is inside and outside the guarantee

Order No. 15 defines guaranteed-purchase electricity as the volume that market members must buy under the consumption-responsibility mechanism and share targets, and market-traded electricity as the volume priced through the market and bought by retailers and users. Article 6 then removes from the guaranteed scope any electricity affected by the generator's own causes, grid security constraints, grid maintenance, market bids or force majeure, and requires the grid, dispatch and trading bodies to record the specific cause and volume.

The record-keeping is where a wind owner's case is made or lost. Grid companies and generators must record unpurchased electricity (excluding self-consumption) and its causes, and dispatch and trading bodies must disclose to each generator, by the 8th of each month, the previous month's volumes and prices (guaranteed, market and temporary dispatch) and the unpurchased electricity with reasons.

3. The 2016 compensation mechanics

The 2016 NDRC Measures (发改能源〔2016〕625号) are, among the national texts retrieved, the one that allocates compensation. For curtailed regions they set guaranteed annual utilisation hours; within the guaranteed volume, curtailment caused by non-renewable generation crowding out consumption space or transmission capacity (not system-security causes) is treated as a transfer of the priority-generation contract to lower-priority units, which pay compensation in proportion to their effect, capped at the gap between the guaranteed volume and actual output. Curtailment from connection-line faults (except force majeure beyond design standards) or unplanned maintenance is compensated by the grid company; shortfalls from resource conditions or the project's own equipment faults and maintenance are borne by the project.

Administration: the trading centre, assisted by the grid company (the grid company is responsible where no trading centre exists), identifies the paying units (including captive plants) by ascending dispatch priority and in proportion to actual output; monthly statistics go to the NEA regional office and the provincial economic authority, allocations may be adjusted between months by actual generation and are settled annually; disputes may be coordinated by the NEA office with the provincial authority.

CNWattHub reading: these Measures are quoted as issued. None of the sources retrieved repeals them, but Order No. 15 (2024) and Document 136 (2025) post-date them and reorganise the guaranteed/market split, so read the 2016 text as the design the system grew from and check the current provincial settlement rules before relying on it.

4. How curtailed energy is measured

NEA's 2022 Measures on wind-farm utilisation statistics define curtailed electricity as electricity the farm could have generated but did not, after excluding its own faults, defects and maintenance; the main method is the nacelle-wind-speed method, with sample-turbine or met-mast extrapolation allowed by agreement with dispatch; curtailment periods follow dispatch instructions or AGC control periods, and both sides must record time, output limit and reason.

Utilisation is defined two ways — counting all curtailment causes (actual generation ÷ possible generation from available turbines) or only system-caused curtailment ((possible generation − system-caused curtailment) ÷ possible generation). Farms report monthly by the 5th; provincial grid companies report to the NEA office by the 15th and disclose results to farms; a farm that disputes the result asks dispatch to re-check and may then ask the NEA office to supervise.

5. Utilisation targets and the numbers

The Clean Energy Consumption Action Plan (2018–2020) set wind-utilisation targets of above 88% in 2018 (curtailment below 12%, striving for 10%), above 90% in 2019 (striving for about 92%; curtailment below 10%, striving for about 8%) and an internationally advanced level in 2020 (striving for about 95%; curtailment controlled at a reasonable level, striving for about 5%), and said that, in principle, for regions above 95% wind or PV utilisation, curtailed electricity would no longer be counted in national curtailment statistics. The plan has expired; it is cited here for how the utilisation and curtailment targets were defined.

NEA's 2024 notice lets provinces set new-energy utilisation targets after consumption analysis and allows regions with good resources to relax them, in principle to not below 90%, with annual dynamic assessment. National wind utilisation was 94% in 2025 (120 GW added; 1.13 trillion kWh generated) and 91.4% in the first quarter of 2026 (304.7 billion kWh, +0.4%; 15.77 GW added, 75% in the 'three north' regions). At its first-quarter 2026 press conference NEA said it is preparing a 2026 new-energy consumption work plan to safeguard stable consumption, especially in key western regions, and that planning aims to support reasonable consumption of more than 200 GW of new energy added per year.

CNWattHub arithmetic: 100% − 91.4% = 8.6 percentage points in the first quarter of 2026 and 100% − 94% = 6 points for the 2025 full year. The releases do not state which of the two 2022 utilisation formulas (all causes, or system causes only) the published rate uses, so these differences should not be read as a measured curtailment share without that confirmation.

6. What Document 136 and the market rules change

Document 136 (2025) moves new-energy output, in principle, entirely into the market with prices formed by trading, and creates an out-of-market difference settlement: for volumes in the mechanism, the grid company settles monthly the difference between the market average price and the mechanism price and charges it to local system operating costs. Separately, NEA's 2021 grid-connection operation rules make dispatch assess generators for unplanned outages, deviations from instructions and new-energy forecast deviations under local implementation rules, and require stations to run forecasting that meets national and industry standards.

CNWattHub reading: for a project whose output is market-traded, 'curtailment' increasingly shows up as unsold or low-priced energy and as deviation assessment rather than as a compensable shortfall in guaranteed hours. The Order No. 15 exclusion for 'market bids' is the hinge: energy not dispatched because of the project's own bid is outside the guarantee.

Reading table

Checklist

CNWattHub editorial method, not a sourced rule:

1. Obtain the monthly disclosure of unpurchased electricity and reasons, and reconcile it with the farm's own nacelle-wind-speed calculation.
2. Classify each curtailment period by the Order No. 15 causes; under Order No. 15 a compensation claim rests on grid-, dispatch- or trading-body fault, while the 2016 Measures' crowding-out allocation applies, if at all, to the guaranteed volume.
3. Check the provincial market rules for how curtailed market-traded energy and forecast deviations are settled; the 2016 allocation applies, if at all, to the guaranteed volume.
4. Confirm the province's utilisation target and whether the project's region is above the floor.
5. Keep dispatch instruction logs: compensation and dispute procedures rely on them.
6. For financing models, use the NEA utilisation definitions and state which one (all causes or system-caused only).

Scope limits

One law (database copy), one NDRC order, two NDRC measures/plans (2016, 2018), two NEA rules (2021, 2022), two NEA notices and two NEA releases only. No provincial rule, compensation price, settlement statement or court decision is cited; the 2016 Measures are quoted as issued; the 2026 work plan was not retrieved. Not legal or investment advice.