Analysis of Inter-Provincial Mechanism Electricity Price Differentiation and Its Impact on Power Industry Investment

Based on the latest market data and analysis, I will provide a detailed analysis of the profound impact of inter-provincial mechanism electricity price differentiation on the investment pattern of the power industry.

According to the newly released new energy bidding results of 19 provinces, mechanism electricity prices show obvious regional differentiation characteristics [1]:

• Shanghai
  : 0.4155 yuan/kWh (the highest in the country)
• Anhui
  : 0.3837-0.384 yuan/kWh
• Yunnan
  : Photovoltaic 0.33 yuan/kWh, wind power 0.332 yuan/kWh

• Shandong
  : Wind power 0.319 yuan/kWh, photovoltaic 0.225 yuan/kWh
• Zhejiang
  ,
  Fujian
  and other East China provinces

• Gansu
  : 0.1954 yuan/kWh (the lowest in the country)
• Guangxi
  : about 0.34 yuan/kWh
• Other provinces in Northwest and Northeast China

• East China has strong electricity demand but limited resources for new energy development, supporting high electricity prices
• Northwest China has excess new energy installed capacity and difficulty in consumption, leading to low electricity prices
• Shanghai has a small new energy scale but strong demand for green electricity, with greater freedom in policy formulation [1]

• Mechanism electricity quota allocation: Shanghai has 2.2 billion kWh, only 538 million kWh participates in bidding; Anhui has 9 billion kWh quota, 5.868 billion kWh participates in bidding
• The setting of competition effectiveness coefficient affects the final clearing price
• There are significant differences in the upper and lower limits of bidding set by each province

• Regional differences in land costs, energy storage configuration requirements, grid connection costs, etc.
• Non-technical costs are generally higher in eastern coastal areas
• Although the western region is rich in resources, its consumption cost is high

• East China
  ’s attractiveness has significantly increased, especially Shanghai, Anhui, and Zhejiang
• Investors are more inclined to layout new projects in areas with higher electricity prices
• It is expected that the growth rate of new energy investment in East China will lead the country in the next 2-3 years

• The return on investment of traditional resource-rich provinces such as Gansu and Xinjiang has declined
• Some projects may face re-evaluation or delay
• Forcing enterprises to improve technical efficiency and reduce costs

• In Shandong, the wind power price is 0.094 yuan/kWh higher than that of photovoltaic, prompting investment to tilt towards wind power
• Each province optimizes the ratio of wind and photovoltaic configuration according to its own electricity price differences
• Technology selection is more refined and localized

• High-price regions are more willing to configure energy storage to increase returns
• In low-price regions, the payback period for energy storage investment is extended, and investment willingness decreases
• The ratio of energy storage to new energy shows regional differentiation characteristics

• While participating in mechanism electricity price bidding, actively layout spot market transactions
• The importance of supplementary revenue channels such as green certificate trading and carbon trading has increased
• Integrated energy service model has become a new trend

• In high-price regions, the difficulty of project financing is reduced, and financing costs are lowered
• Low-price regions face higher financing thresholds and costs
• Project financing pays more attention to regional risk assessment

• Shanghai Metropolitan Area
  : Highest electricity price in the country, strong demand for green electricity
• Anhui-Zhejiang Corridor
  : High electricity prices, good industrial foundation
• Guangdong-Hong Kong-Macao Greater Bay Area
  : Mechanism electricity price for distributed photovoltaic in Guangdong is 0.2-0.4 yuan/kWh, mature market [2]

• Some areas in Northwest China: Need to focus on consumption guarantee and transmission channel construction
• Areas with oversaturated new energy installed capacity: Fierce competition, profit pressure

• The upper limit of the declared proportion of mechanism electricity for distributed photovoltaic in Guangdong is 70%-80% [2]
• Local consumption, reduce transmission loss
• Easier to obtain higher electricity prices

• Wind-solar-storage integrated projects are competitive in different regions
• Able to smooth electricity price fluctuations and improve project stability
• In line with the policy encouragement direction of various regions

With the continuous growth of new energy installed capacity and the deepening of marketization, the mechanism electricity price differences among provinces are expected to further expand [3]:

• East China
  may maintain a high level or even continue to rise
• Northwest China
  faces downward pressure and needs to rely on cost advantages
• Central and South China
  regions will show a stable and slightly differentiated trend

1. Increased Industrial Concentration
   : Leading enterprises concentrate in high-return regions
2. Accelerated Technological Upgrade
   : Forcing enterprises to improve technical level and reduce electricity cost per unit
3. Business Model Innovation
   : Transformation from single power generation to integrated energy service provider

Each province will continue to optimize the mechanism electricity price policy design according to local actual conditions, balancing the relationship between new energy development and safe and stable operation of the power system.

[1] 新浪财经 - “16省机制电价出炉：最低0.19元、最高0.41元，差距为何如此悬殊？” (https://finance.sina.com.cn/wm/2025-12-05/doc-infzuerw8230589.shtml)

[2] 新浪财经 - “国盛证券：19省新能源竞价结果出炉上海最高甘肃最低” (https://finance.sina.com.cn/stock/zqgd/2025-12-10/doc-inhahtci0645342.shtml)

[3] 四川中自未来能源 - “广东分布式光伏机制电价竞价：0.2-0.4元/kWh，70%-80%，12年” (http://www.zz-sfes.com/4/2)