The “Guangdong model”: redefining gas power in China’s high-renewable grid

Guangdong’s July 2025 gas power policy reform marks a significant shift from the previous model. Gas plants previously operated with guaranteed dispatch hours, an approved on-grid tariff, and an additional subsidy when the system-wide weighted average cost of gas (WACOG) is beyond a certain level. The new policy introduces pure economic dispatch, requiring plants to bid to recover fuel costs. In exchange, capacity payments have increased significantly, now covering full capital expenditure rather than only a partial recovery. The policy compensates plants for availability rather than generation, reinforcing the shift to peaking roles.