Global renewable energy certificate registry Evident has signed an agreement with CSG Carbon Asset Management, a wholly owned subsidiary of China Southern Power Grid (CSG), for the latter to become the first domestic issuer of international renewable energy certificates (I-RECs) in China.
CSGCM is the first domestic issuer of I-RECs in China, covering the provinces of Guangdong, Guangxi, Yunnan, Guizhou and Hainan, as well as Hong Kong and Macau. All renewable power generators in these regions and all power consumers in China will now be able to use the internationally recognised I-REC Standard for energy attribute reporting. This aligns the domestic market in China with the expanding requirements of global trade and is likely to boost market liquidity, following similar developments in the Brazilian and Turkish markets in recent years. Evident's registry accounts for more than 95pc of voluntary renewable energy certificates markets outside Europe and North America.
China is the largest global I-REC market, accounting for nearly 45pc of global certificate supply and almost a third of global demand last year. Chinese I-REC demand surpassed 30TWh in 2022, up by around 50pc from 2021. It has significant growth potential given the size of China's power consumption, which was 8,640TWh in 2022, according to government data.
China's wind and solar generation capacity grew at the fastest rate among renewable sources last year. Installed wind power capacity rose by 11.2pc from a year earlier to 365.4GW in 2022 and installed solar power capacity grew by 28pc to 392.6GW, data from China's main economic planning agency the NDRC show.Global I-REC demand rose by nearly two-thirds from a year earlier to [60TWh in January-March this year, up from 36TWh in the same period last year and compared with just under 100TWh throughout 2022. Total issuance increased by more than 30pc to 73TWh in the first quarter. The pace of redemptions more than doubled as global corporate carbon disclosure continues to rise, in particular using I-RECs to cover scope 2 emissions. Chinese demand dropped slightly below Brazil in the first quarter, likely in part as strict Covid-19 measures weighed on electricity demand. Chinese power consumption fell by more than 25pc from the previous year during January-March to 1,421TWh, down from 2,077TWh a year earlier.
Chinese hydropower I-RECs for 2023 vintage were trading at around $0.35/MWh recently, while 2023 wind and solar I-RECs hold at a premium at around $0.75-0.80/MWh, according to Argus data.
