[SMM Hydrogen Energy Policy Express] National Development and Reform Commission (NDRC), National Energy Administration: *Notice on Matters Related to Orderly Promoting the Development of Direct Connection of Green Electricity*

The document states that the direct connection of green electricity, as referred to in this paper, means that new energy sources such as wind power, solar power, and biomass power are not directly connected to the public power grid. Instead, they supply green electricity to a single power user through direct connection lines, enabling a model with clear physical traceability of the supplied electricity.

Standardize project construction. New loads can be supported by the construction of new energy projects. For existing loads, direct connection of green electricity can be carried out on the premise that the existing coal-fired and gas-fired captive power plants have fully paid the renewable energy development fund. By reducing the output of captive power plants, clean energy substitution can be achieved. Export-oriented enterprises with rigid carbon reduction requirements can explore the direct connection of green electricity for existing loads by utilizing surrounding new energy resources. Support is given to new energy projects that have not yet initiated grid connection construction or are unable to be connected to the grid due to reasons such as limited new energy consumption. These projects can proceed with direct connection of green electricity after fulfilling the corresponding change procedures.

Encourage model innovation. In principle, the load serves as the primary responsible entity for direct connection of green electricity projects. Various business entities, including private enterprises (excluding power grid enterprises), can invest in direct connection of green electricity projects. The project's power supply can be invested by the load, by power generation enterprises, or by a joint venture established by both parties. In principle, the direct connection line should be invested by the load and the power supply entity. If the project's power supply and load are not invested by the same entity, a multi-year power purchase agreement or an energy performance contracting agreement should be signed, along with agreements on matters such as power facility construction, property rights division, operation and maintenance, dispatching and operation, settlement relationships, and liability for breach of contract. New energy power generation projects within the project are exempt from power business licenses, unless otherwise specified.

In terms of trading and pricing mechanisms, encourage participation in the market as a whole. Grid-connected direct connection of green electricity projects enjoy equal market status and should register in accordance with the "Basic Rules for Registration in the Electricity Market." In principle, they should participate in electricity market trading as a whole, arrange production based on market transaction results, and settle accounts according to the exchange power with the public power grid. The project load shall not be purchased by power grid enterprises on behalf of the user. If the project's power supply and load are not invested by the same entity, they can also register separately and participate in electricity market trading in an aggregated form.

Pay relevant fees reasonably. Direct connection of green electricity projects should pay transmission and distribution fees, system operation fees, policy-based cross-subsidies, government funds, and surcharges in accordance with the relevant regulations of the price and financial authorities of the State Council. Localities shall not reduce or exempt relevant fees in violation of state regulations.