At a press conference held by the Information Office of the Shandong Provincial Government on April 15, Yue Jianru, Deputy Director of the Shandong Energy Bureau, announced that the province’s installed capacity of renewable energy has surpassed 100 million kilowatts, with solar power accounting for 80 million kilowatts.
Source: The Paper
At a press conference held by the Information Office of the Shandong Provincial Government on April 15, Yue Jianru, Deputy Director of the Shandong Energy Bureau, announced that the province’s installed capacity of renewable energy has surpassed 100 million kilowatts, with solar power accounting for 80 million kilowatts. During the spring and autumn seasons, solar and wind energy generation often spikes, leading to a mismatch between supply and demand. As a result, the midday hours — when renewable output peaks — have become increasingly difficult to manage due to low demand.
To tackle this issue, Shandong has implemented a five-tier time-of-use electricity pricing system that includes steeply discounted rates during periods of high solar output. These “deep off-peak” prices offer discounts of up to 90%, incentivizing users to shift energy-intensive operations to midday hours and increase consumption of surplus renewable energy. In 2024 alone, this pricing strategy helped the provincial grid add up to 5.84 million kilowatts of midday load and absorb an additional 2.3 billion kilowatt-hours of solar and wind power — significantly easing grid pressure and boosting efficiency.
Shandong is the first province in China to introduce such deep off-peak electricity pricing. Under the new system, the day is divided into five periods: critical peak, peak, flat, off-peak, and deep off-peak. For example, in April 2025, the electricity rate for general industrial and commercial users connected at 35 kV is 0.35 yuan per kilowatt-hour during off-peak hours (10:00 a.m. to 3:00 p.m.). Within that window, the deep off-peak period from 11:00 a.m. to 2:00 p.m. offers a reduced rate of just 0.25 yuan. Peak hours (5:00 p.m. to 10:00 p.m.) are priced at 1 yuan per kilowatt-hour, with the critical peak period (5:00 p.m. to 8:00 p.m.) reaching 1.2 yuan. All other hours fall into the flat-rate category at 0.71 yuan.
The province has also developed a dynamic adjustment mechanism to reflect seasonal shifts in energy supply and demand. For instance, midday hours that once counted as peak periods have been reclassified as off-peak or deep off-peak during sunny months with high solar output. This change reflects a fundamental shift in how electricity is valued in the era of renewables. The new policy also introduces much broader price fluctuations: peak-hour rates for industrial and commercial users rise 70% above the flat rate, while off-peak rates fall by 70%, critical peak rates double, and deep off-peak rates drop by 90%.
This more refined time segmentation has created a powerful economic incentive. In the industrial sector, manufacturers are using smart upgrades and flexible scheduling to shift high-energy processes to cheaper time slots, significantly lowering electricity costs. In the residential sector, consumers can charge electric vehicles during deep off-peak hours for as little as 0.2 yuan per kilowatt-hour. In agriculture, forestry and grain processing businesses are adjusting work hours to cut electricity expenses.
The policy has also helped relieve stress on the grid during evening peaks. According to Yue Jianru, in 2024, the time-of-use pricing model enabled the grid to shed up to 2.26 million kilowatts in evening peak demand, narrowing supply gaps and ensuring stability during the summer's highest-demand periods. During that time, the grid’s load exceeded 100 million kilowatts for 38 days, reaching a record high of 114.5 million kilowatts.
As temperatures continue to rise, Shandong is bracing for another summer surge in electricity demand. Preliminary estimates suggest the province’s peak load this year could reach 122 million kilowatts — a 6.53% increase year-on-year. To maintain a secure and stable power supply, the province will continue to rely on time-of-use pricing to encourage off-peak consumption and smooth out load curves across the grid.
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