China’s first market-based renewable energy auction in Shandong awarded 4.856 GW capacity for 2025 operations
Solar dominated with 1.265 GW awarded at RMB 0.225/kWh, 43% below benchmark price
Wind secured 3.59 GW at RMB 0.319/kWh, 19.2% below benchmark, showing strong competition
China, the world’s largest solar PV market, has concluded its inaugural renewable energy auction under the country’s new market-oriented power reforms that came into force on June 1, 2025.
The Shandong Development and Reform Commission launched the bidding in August this year, covering wind and solar PV projects that need to come online between June 1, 2025, and December 31, 2025 (see China Solar PV News Snippets).
The 1st provincial auction under the reforms attracted over 3,000 project participants. The commission finally selected 1,200 winning projects representing a combined capacity of 4.856 GW, enough to generate 7.215 billion kWh of clean energy, as widely reported by local media.
Solar PV projects, totaling 1,175 in number, make up the lion’s share of the winning projects, representing 1.265 GW capacity and 1.248 billion kWh of power generation, at a ‘clearing price’ of RMB 0.225/kWh ($0.031)/kWh. Of the total solar PV capacity selected, 1.22 GW is for utility-scale projects, while the remaining 46 MW is for distributed solar.
The 25 winning wind projects account for 3.59 GW of capacity and 5.967 billion kWh of clean energy generation, cleared at RMB 0.319 ($0.044)/kWh.
Compared to the benchmark electricity price of RMB 0.3949 ($0.055)/kWh set for the auction, the winning price for solar projects declined by 43%, and for wind it was down by 19.2%.
China announced a shift from feed-in-tariffs (FIT) to market-oriented pricing reforms, or the contracts for difference (CfD) mechanism, earlier this year (see World’s Biggest Solar Market Moving Towards CfD Mechanism).
This triggered a solar installation rush that led to the market reporting 198 GW in new installations within 5M 2025, including over 92 GW in May, and a subsequent drop to 14.36 GW in June and 11.04 GW in July. Nevertheless, the market is poised for further growth in 2025 compared to 2024, as the country forecasts 380 GW of new capacity within this year (see China Forecasts 380 GW New Solar PV Installations In 2025).
Shandong is the 1st Chinese province to auction renewable energy capacity under the new power reforms, requiring the winning projects to start operations in 2025. More provinces are likely to follow suit which should further boost national installations.
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