China’s Two Sessions: implications for energy markets and policies

All eyes have been on the “Two Sessions”, China’s annual parliamentary meeting, for clues into macroeconomic policy and energy policy this year. Renewable curtailment rates are set to rise again this year because of the coal overcapacity and the recently introduced capacity payment mechanism. The end goal is to encourage coal as back up for renewables, but the short-term impact is a potential drag on their dispatch.