Direct Green Power Connection is Expected to Reshape the Business Model of Waste to Energy
Recently, the National Development and Reform Commission of China and the National Energy Administration jointly issued the Notice on Orderly Promoting the Development of Direct Green Power Connection (No.650 [2025] of Development and Reform Energy), which clearly stated that all kinds of business entities including private enterprises (excluding power grid enterprises) should be supported to invest in Direct Green Power Connection projects, and the provincial energy authorities should cooperate with each other to do relevant work and support the participation of private capital.
The notice requires that the proportion of spontaneous self-use electricity in the overall new energy year of the project to the total available power generation should be not less than 60%, and the proportion of total electricity consumption should be not less than 30%, and the proportion of spontaneous self-use should be continuously increased to promote the local consumption of new energy.
Direct Green Power Connection means that the power supply is not directly connected to the public power grid, but supplied to a single user through the power line directly connected to the user, and the supplied power can be clearly traced back physically.
The first is the power supply and users of the Direct Green Power Connection project. At present, the Direct Green Power Connection includes new energy sources such as wind energy, solar energy, biomass energy, and both newly-built power sources and existing new energy projects that have not yet been connected to the power grid or cannot be connected to the grid due to limited consumption of new energy. The load includes the new load, as well as the stock load of coal-fired gas-owned power plants or export-oriented enterprises.
The second is the type of Direct Green Power Connection project. Direct Green Power Connection projects are divided into grid-connected projects and off-grid projects. The power supply of grid-connected projects should be connected to the user side, and the project power supply, users and lines as a whole are connected to the public power grid, forming a clear physical interface and responsibility interface with the public power grid; The power supply, users and lines of the off-grid project are not electrically connected to the public power grid, and operate as an independent system.
The third is the construction principle of Direct Green Power Connection project. The Direct Green Power Connection project aims to meet the green energy demand of enterprises and improve the local consumption level of new energy. It is constructed and operated according to the principles of safety priority, green friendship, equal rights and responsibilities, and source-load matching, and it assumes safety, economic and social responsibilities fairly and reasonably.
Direct Green Power Connection is beneficial to the waste incineration power generation industry, and it is expected to promote the business model of waste incineration power generation from G-end to B-end. All along, waste to energy projects can only be sold by feed-in, but in recent years, the ever-increasing accounts receivable have seriously dragged down the cash flow of waste incineration power generation enterprises. With the implementation of the Direct Green Power Connection policy, waste incineration power generation enterprises are expected to directly supply power to surrounding power users, and the cash flow is more secure than the previous pure power generation feed-in.