On May 20, China’s National Development and Reform Commission and National Energy Administration issued NDRC Energy [2026] No. 688, a notice on orderly promoting multi-user green-power direct connection. The policy defines the model as wind, solar or biomass power that does not directly enter the public grid, but instead supplies several legal-entity users through dedicated lines and transformer facilities, with clear tracing and allocation of the delivered green electricity. Residents and agricultural users are excluded. Projects may be grid-connected or off-grid, but they must have clear physical and responsibility boundaries.
The significance is that China has moved beyond the first green-power direct-connection experiment. The 2025 framework mainly opened the door to single-user direct supply. The 2026 notice upgrades the model to ‘one power source, multiple users’ or, more precisely, a dedicated source-grid-load arrangement serving several corporate buyers. That sounds technical, but it changes the business case. A single factory may be too small, too risky or too inflexible to support a dedicated renewable-supply project. A park, a cluster of suppliers, or a group of carbon-constrained exporters can share the cost and the demand profile.
The policy’s scope shows where Beijing sees demand pressure. It covers new loads that build renewable supply together, existing single-user projects that absorb additional new load, companies with green-power consumption requirements, key energy-using and carbon-emitting enterprises, export-oriented companies with decarbonization needs and their upstream and downstream firms, industrial parks, zero-carbon parks and incremental distribution networks. It also allows distributed solar to participate through centralized aggregation. Securities Times, citing 21st Century Business Herald, noted that industrial parks account for more than 66% of China’s total energy consumption. That makes the park, not the individual showcase factory, the real transition battlefield.
For foreign readers, the policy should be read as an industrial-competitiveness measure, not only as a climate measure. Export-facing manufacturers increasingly need credible low-carbon electricity evidence for customers, product-carbon accounting, green supply-chain requirements and possible border-carbon costs. Green certificates and market purchases can help, but many buyers and regulators are becoming more interested in physical matching, location and additionality. A direct-connection project gives companies a clearer story: this electricity comes from this renewable resource through this infrastructure to these users under this allocation mechanism.
The strongest feature of the notice is its project discipline. The policy requires projects to follow an ‘load determines source’ principle. Annual self-generated and self-used electricity must be no less than 60% of total available generation, and self-generated electricity must account for at least 30% of total electricity use, rising to at least 35% before 2030. These thresholds matter. They reduce the risk that direct-connection projects become symbolic assets with weak actual consumption. They also force developers to think about load curves, storage, operating schedules and contractual allocation before building capacity.
The same discipline creates new risks. Multi-user direct connection is not simply cheaper green electricity. The project must identify a single responsible project entity with legal-person status. That entity is expected to organize planning, construction, operation, user coordination, grid interface and life-cycle management. It must invest in or arrange connection lines, transformer facilities, storage and operating platforms, and it must sign internal agreements on property rights, operations, balancing responsibility, internal fees, settlement and default responsibility. In other words, the green-power claim comes with a governance structure.
That governance structure will be the ESG test. If a zero-carbon park claims lower emissions because it uses direct green power, investors need to know who operates the project, how the electricity is measured, how costs are allocated, how outages are handled, whether storage is sufficient, whether the public-grid interface is safe, and how renewable attributes are prevented from being double-counted. A credible direct-connection model can improve product-carbon accounting. A weak one can create a new class of opaque green claims hidden behind engineering language.
The policy also reflects the physical limits of China’s renewable boom. It explicitly supports renewable projects that have not yet started grid-connection works, or projects constrained by renewable consumption limits and unable to connect to the grid, to shift into multi-user direct connection after completing required procedures. That is an important signal. Beijing is not only adding demand for green power; it is trying to create alternative routes for renewable output that might otherwise wait for grid capacity or suffer curtailment. Direct connection becomes a pressure valve for the public grid.
But a pressure valve is not a substitute for system planning. A direct-connection project still interacts with the public grid if it is grid-connected. The notice requires projects to configure protection, stability-control and communication systems, strengthen operating-management capability, coordinate internal generation, load and storage resources, and keep exchange power with the public grid within the approved connection capacity. These requirements are essential because dedicated green-power systems can create reliability risks if they are built faster than their operators’ dispatch capability.
The notice therefore favors companies that can manage electricity as an operating system. The most attractive users are not only those that want green labels, but those that can respond to price signals and flexibly adjust load. The Securities Times article quoted the energy regulator as saying that flexible industrial and commercial users are suitable because they can optimize electricity timing and volume, improve source-load matching, reduce reliance on the large grid, and lower transmission and distribution costs. That is a new kind of corporate capability: carbon competitiveness through load flexibility.
This is especially relevant for computing facilities and green hydrogen, ammonia and methanol projects, which the notice identifies as priority emerging and future industries. These sectors are power-intensive and reputation-sensitive. If they can locate near renewable resources and operate flexibly, they can absorb clean power and reduce curtailment. If they simply add rigid load with a green label, they may worsen local balancing pressure. Direct connection will separate serious operators from companies using decarbonization language to justify ordinary electricity demand growth.
For supply chains, the policy may be more powerful than a pure subsidy. A small or medium-sized supplier in a park may not be able to sign a sophisticated green-power purchase agreement or build a dedicated energy project alone. Under a multi-user model, it can share infrastructure with anchor users and other firms. This could lower the carbon-accounting barrier for smaller exporters and upstream component makers. It could also make industrial parks compete on verified clean-energy access, not only on land, tax treatment and logistics.
The risk is that local governments and developers overpackage parks as zero-carbon or green-power direct-connection projects before the measurement system is mature. The notice’s thresholds and responsibility rules help, but they do not eliminate the need for disclosure. A high-quality project should publish generation mix, hourly matching, consumption allocation, storage capacity, public-grid exchange, renewable-attribute treatment, outage performance and user-level emission accounting. Without those data, foreign buyers may still treat direct-connection claims as local assertions rather than globally comparable evidence.
The financing implication is also selective. Direct-connection projects can create demand for distributed solar, wind, transformers, protection systems, storage, operating platforms, metering, settlement software and energy-management services. But not every supplier benefits equally. The most valuable positions are in integrated source-grid-load-storage design, reliable measurement, flexible dispatch and project operation. Generic equipment sales may grow, but the ESG premium belongs to companies that make direct green electricity auditable and bankable.
The policy also forces a sharper view of green certificates. Certificates are useful for scale and market liquidity, but direct physical supply answers a different question: where did the electricity actually go, and did it serve the specific production activity that needs a low-carbon claim? As product-level carbon rules become more granular, the premium may shift from paper attributes toward physical or time-matched evidence. China is not abandoning certificate markets; it is adding a stronger physical-procurement channel for users that need higher confidence.
This creates a delicate balance with the public grid. If too many attractive industrial users exit ordinary grid procurement through dedicated arrangements, cost allocation and system responsibility become sensitive. The notice tries to manage this by defining grid-connected and off-grid categories, connection capacity, responsibility boundaries and internal balancing obligations. Future implementation will need to ensure that direct-connection users pay fairly for backup, reliability and public-grid services. Otherwise, lower private green-power costs could be partly subsidized by system users outside the project.
The broader China ESG signal is that decarbonization is becoming more contractual and infrastructural. Earlier transition narratives often focused on capacity: how much solar, how much wind, how many EVs. The next phase asks whether clean electricity can be delivered to the factories, data centers and suppliers that need credible low-carbon output. Multi-user direct connection is an attempt to match renewable supply with industrial demand at a more granular level. It is a practical response to curtailment, export pressure and park-level decarbonization.
For companies, the question is no longer whether they can buy green power in some form. It is whether they can prove the operational link between green electricity and business activity. For investors, the question is no longer whether a park or company uses the word zero-carbon. It is whether the project has load discipline, dispatch capability, transparent metering, contractual clarity and credible allocation. The May 20 notice is important because it gives China’s green-power market a more physical architecture. The hard part starts now: making that architecture trustworthy enough for customers, financiers and regulators to rely on.
There is one more reason this policy deserves cover-story status: it may change the geography of low-carbon manufacturing. If direct green-power access becomes a decisive factor for export eligibility and customer procurement, industrial clusters with nearby renewable resources, flexible loads and capable park operators can gain an advantage over traditional coastal clusters that rely mainly on ordinary grid procurement. That does not mean factories will simply move inland. Logistics, labor, suppliers and customers still matter. But electricity attributes may become one of the variables in site selection, especially for aluminum processing, battery materials, data processing, hydrogen derivatives and other carbon-sensitive activities.
The policy also creates a new due-diligence checklist for lenders and bond investors. A project that claims to serve multiple users should show binding offtake contracts, realistic load forecasts, a credible storage and backup plan, cybersecurity and protection systems, dispute-resolution rules among users, and a transparent method for allocating both electricity and green attributes. If those elements are missing, the project may look green but behave like an under-governed private grid. If they are present, direct connection can become a bankable transition asset: it lowers renewable curtailment, improves industrial carbon evidence, and gives users a clearer path to meet customer and regulatory demands.
From Issue 006 · 18–24 May 2026.
Questions or corrections? Contact the editor.