Qinghai has officially kicked off its mechanism power price auction for 2027 new energy incremental projects, with solar bidding bounded between 0.15 yuan/kWh and 0.2277 yuan/kWh, wind between 0.18 yuan/kWh and 0.24 yuan/kWh, a total mechanism volume of 2.859 billion kWh, and a guaranteed execution period of 12 years.
On October 28, the Qinghai Provincial Development and Reform Commission issued a notice on organizing the 2027 new energy incremental projects to carry out mechanism power price auction work. According to the document, in line with the requirements of the Notice on Issuing the Implementation Plan for Deepening the Market-Oriented Reform of New Energy On-Grid Power Prices in Qinghai Province (Qing Fa Gai Jia Ge Gui [2025] No. 645) jointly issued by the Provincial Development and Reform Commission, the Northwest Regulatory Bureau of the National Energy Administration, and the Provincial Energy Bureau, a decision has been made to organize the 2027 new energy incremental projects in Qinghai to conduct mechanism power price auction work.
Eligible Participants
New energy projects that achieve full-capacity commercial operation between June 1, 2025 and December 31, 2027, and that have never been included in the scope of mechanism power price execution. Bidding is organized separately by category, distinguishing between wind power and solar power generation.
Auction Parameters
(1) Volume Scale. The total mechanism volume for this auction is 2.859 billion kWh, of which wind power accounts for 1.451 billion kWh and solar power accounts for 1.408 billion kWh.
(2) Price Cap Levels. The upper and lower limits for solar bidding are 0.2277 yuan/kWh and 0.15 yuan/kWh respectively. The upper and lower limits for wind bidding are 0.24 yuan/kWh and 0.18 yuan/kWh respectively.
(3) Execution Period. The guarantee period is 12 years. For projects already in operation at the time of auction selection, execution begins on the first day of the month following the selection date; for projects not yet in operation at the time of selection, execution begins on the first day of the month following the actual commercial operation date (first-year execution volume is prorated on a monthly basis). For projects that commence operation later than the declared operation date, the mechanism volume covered between the first day of the month following the committed operation date and the end of the month in which actual operation begins (prorated monthly) automatically becomes void.
(4) Upper Limit for Declared Volume. For centralized single projects, the upper limit for declared mechanism volume equals installed capacity (AC side) multiplied by the annual power generation utilization hours for that power source type, multiplied by (1 minus auxiliary power consumption rate), multiplied by the upper limit ratio. For distributed (decentralized) projects, the upper limit for declared mechanism volume equals installed capacity (AC side) multiplied by (1 minus the ratio of annual self-consumed electricity to total generation), multiplied by the annual power generation utilization hours for that power source type, multiplied by the upper limit ratio. Among these, the annual power generation utilization hours for wind and solar are 1,462 and 1,186 respectively; the auxiliary power consumption rates are 0.79% and 0.63% respectively; and the upper limit ratios are 60% and 80% respectively. For distributed solar and decentralized wind, the ratio of annual self-consumed electricity to total generation is 13.57%. The upper limit ratio is uniformly set at 100%.
(5) Performance Guarantee Bond Requirements. Projects not yet in operation must submit a performance guarantee bond as required. The minimum bond amount is calculated as project approved (filed) installed capacity (AC side) multiplied by the average power generation utilization hours over the past three years for that power source type sold within the province, multiplied by the average on-grid tariff over the past three years for that power source type, multiplied by 5%. Among these, the average power generation utilization hours over the past three years for wind and solar electricity sold within the province are 757 and 766 respectively, and the average on-grid tariffs are 0.2206 yuan/kWh and 0.2280 yuan/kWh respectively.
(6) Automatic Adjustment Mechanism for Declaration Sufficiency Ratio. The solar (wind) declaration sufficiency ratio equals the total actual valid declared volume for solar (wind) divided by the total mechanism volume for the solar (wind) auction, multiplied by 100%. To ensure full competition, the lower limit for the solar (wind) declaration sufficiency ratio in this auction is set at 130%. When the declaration sufficiency ratio is less than or equal to 130%, the total mechanism volume for the solar (wind) auction is automatically adjusted to: total actual valid declared volume for solar (wind) divided by 130%.
(7) Automatic Adjustment Mechanism for Marginal Clearing Projects. To avoid the marginal clearing mechanism causing marginal projects to clear with small volumes, thereby affecting their returns: when the marginal project clearing volume ratio (cleared volume divided by declared volume) is less than or equal to the marginal lower limit ratio (25% multiplied by 1 divided by the declaration sufficiency ratio), the marginal project's auction result is voided and deemed not selected, and it may participate in later auctions. Correspondingly, the total mechanism volume for the auction is reduced by the marginal project's cleared volume, and the overall auction clearing price is adjusted to the bid price of the next marginal project.
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