Direct green power connections are fundamentally a crucial measure to enhance the utilization of renewable energy, with the primary aim of balancing the core conflict between the addition of new green power capacity and declining profitability in the green power sector. From "Document 650" to "Document 1192" and "Document 688," the policy framework for direct green power connections has been continuously refined, indicating a clear trend from a policy perspective. There is sustained optimism regarding the development of various application scenarios under the direct green power connection business model, including computing-power synergy and zero-carbon industrial parks. Under the computing-power synergy model, the primary participation methods for power operators are 1) direct supply of green power to data centers, and 2) investment in computing-power projects.

EB SECURITIES outlines its main viewpoints as follows: The intensifying triple mismatch makes traditional models unsustainable, positioning direct green power connections as the key solution. 1) Spatial Mismatch: China's wind and solar resources exhibit a typical pattern of being abundant in the west and scarce in the east. Under this spatial mismatch, the green power absorption levels in major power-generating provinces are showing a year-on-year declining trend. 2) Temporal Mismatch: On a daily basis, demand load remains high starting from around 10 a.m., while photovoltaic output begins to decline in the evening, leading to a mismatch between green power output periods and peak demand hours within the day. 3) Mismatch with International Market Mechanisms: China's green certificates are not yet mutually recognized with the EU. Export-oriented enterprises relying solely on domestic green certificates would be compelled to use the EU's default high carbon value for CBAM declarations, increasing their costs. Direct green power connections can alleviate the transmission and peak-shaving pressure on the main power grid while providing export enterprises with traceable, low-cost green power supply, effectively meeting CBAM requirements for green power certification.

Policy Refinements and Economic Viability

In May 2025, "Document 650" addressed the legality issue of "whether it can be built." This document, for the first time at the national level, clarified the definition and compliance pathway for direct green power connections, established the principle of "determining supply based on load," and opened investment eligibility to various business entities beyond grid companies. This granted direct green power connections clear "legal identity." In September 2025, "Document 1192" addressed the economic feasibility. Starting from the pricing mechanism, the document clarified rules such as transmission and distribution fees being paid under a "single capacity system" and system operation fees being charged only for power drawn from the grid, making projects financially calculable and fundable. Subsequently, 17 provinces and municipalities intensively issued supporting detailed rules, and in March 2026, direct green power connections were included in the Government Work Report. In May 2026, "Document 688" was issued, introducing innovations on the original one-to-one model by incorporating multi-user direct green power connections, clearing organizational hurdles for large-scale promotion.

Establishing Legitimacy and Defining Economic Parameters

The issuance of "Document 650" marked the clear "legal identity" of direct green power connections, elevating it from local pilots to a nationally recognized new form of power business. "Document 1192" tackled the core issue of project profitability through the pricing mechanism, transitioning direct green power connections from policy feasibility to economic feasibility. Compared to the traditional model of purchasing power directly from the grid, the excess returns from direct green power connections primarily stem from policy dividends (the differential saved compared to fees paid to the grid under the traditional model). According to the firm's forecasts, the direct green power connection model saves approximately 0.028 yuan per kilowatt-hour in comprehensive levelized cost compared to the traditional model, a reduction of about 4.00%.

The proportion of self-generation and self-consumption is a sensitive factor affecting project economics. A higher self-consumption ratio leads to more significant savings in the project's comprehensive levelized cost, which aligns with the policy design objective (localized consumption to reduce grid absorption pressure) and the logic behind the system operation fee calculation method stipulated in "Document 1192." Therefore, high-quality users with a high self-consumption ratio, such as data centers, will be the primary beneficiaries of the direct green power connection model. The specific benefit level for a project should also consider factors such as the matching degree between the corresponding green power output curve and the load consumption curve, the scale of energy storage configuration, and its installation costs.

Key Risk Factors to Consider

Risks include potential delays or underperformance in policy implementation and execution; fluctuations in business models and economic viability; technological and operational safety risks; and the risk of intensifying industry competition.