China's electricity market reached a new milestone in 2025, with traded power volume surging to a record 6.64 trillion kilowatt-hours, as the nation accelerates its transition toward market-driven energy pricing.

The total volume represents a 7.4 percent year-on-year increase, accounting for 64 percent of China's total electricity consumption, a 1.3 percentage point rise from the previous year.

The data, recently released by the National Energy Administration, underscore Beijing's success in shifting toward a more flexible, competitive power system capable of handling a high-tech industrial economy, said industry experts and government officials.

The country's accelerating transition to a competitive, market-oriented energy landscape will further power the nation's upgrade into a high-tech industrial powerhouse, they said.

According to the China Electricity Council, the national unified electricity market, as a cornerstone for the allocation of new energy resources, will further enable the optimized nationwide deployment and efficient consumption of new energy.

Emerging entities like new energy storage, load aggregators and virtual power plants have achieved market-oriented breakthroughs on a large scale in recent days, injecting new vitality into the power market, said Yang Kun, executive vice-chairman of the council.

The expanding and diversifying auxiliary services market provides critical support for high-penetration renewable energy integration, Yang said, adding that China has seen its electricity market system gradually improving and resource allocation capabilities being increasingly optimized over the past decade, as the country's power system reforms continue to deepen.

According to a guideline recently issued by the National Development and Reform Commission, China will create a coordinated and efficient multilevel regulatory framework for new energy consumption by 2030, while new electricity demand should be met predominantly through expanded new energy power generation by then.

A new power system capable of accommodating a high share of new energy should be established by 2035, with further improvements in new energy consumption and regulation systems, it said.

The NEA said the shift toward a unified national power market was evidenced by the rapid growth in interprovincial and interregional trading, which rose 11.6 percent over the full year to reach 1.59 trillion kWh. This growth outpaced intra-provincial trading, which grew at a more modest 6.2 percent.

The most significant growth occurred in the green electricity sector. For the full year, green power trading volume skyrocketed by 38.3 percent to reach 328.5 billion kWh, the NEA said.

This trend intensified in the final month of the year. In December alone, green power transactions hit 31.7 billion kWh, a 32.3 percent year-on-year jump, said the NEA.

While medium and long-term contracts remain the bedrock of the market, the spot market is also beginning to gain traction, it said.

Despite the rapid expansion and modernization, a direct result of substantial domestic investment and a clear strategic focus on energy development, experts cautioned that the industry must still overcome significant obstacles, particularly regarding the reliability of an increasingly vast and intricate system as the proportion of variable renewable energy grows.

The evolution of the power sector, which has undergone two decades of deep-seated reforms with a massive infrastructure that currently holds the title of the world's largest installed power capacity, is a cornerstone of China's national strategy to reach carbon neutrality before 2060, said Shu Yinbiao, an academician at the Chinese Academy of Engineering.

The rising integration of intermittent energy sources, however, creates new complexities, requiring advanced technical solutions to maintain grid stability and ensure that electricity delivery remains consistent, Shu said.

To meet these future challenges, he advocated for a renewed focus on independent innovation within the energy sector as achieving breakthroughs in core technologies is vital for the stable operation of next-generation power systems.

It is necessary to come up with continued technological progress to support the large-scale deployment of clean energy solutions throughout China, Shu added.