# capacity payments

China Tightens Capacity‑Payment Regime to Shore Up Power Security and Smooth the Renewable Transition

China’s NDRC and NEA have instructed provinces to strengthen capacity‑price mechanisms for coal, gas, pumped storage and new grid storage, mandating that capacity payments recover at least 50% of coal units’ fixed costs and establishing rules for reliable capacity compensation tied to spot market development. The package aims to stabilise dispatchable revenues, encourage storage participation in markets and support reliability as renewables expand, while requiring provincial assessments of consumer affordability and stricter performance oversight.