PCG Power, Octopus Energy Launch Power Trading Venture in China

1. Chinese renewable energy developer PCG Power Development Co. Ltd. has formed a 50-50 joint venture, Bitong Energy, with U.K.-based Octopus Energy Ltd. The new company aims to introduce artificial intelligence (AI)-driven electricity trading in China. This partnership leverages Octopus Energy’s advanced algorithmic trading and forecasting technology, and PCG Power’s local market expertise, including its connections with China’s commercial and industrial users and knowledge of regional electricity trading regulations. The announcement coincided with the U.K. Prime Minister’s state visit to China and is considered a rare direct entry for a foreign energy company into China's heavily regulated electricity market. [para. 1][para. 2][para. 3]

2. The collaboration is a response to China’s ongoing efforts to liberalize its power market. As the country moves away from long-standing policies of guaranteeing grid purchases for renewable energy, renewable producers now face a competitive, volatile market environment where efficient power delivery to customers via digital platforms is key to success. PCG Power’s CEO Li Wenxuan emphasized that the partnership marks a significant shift from the traditional approach of building capacity to a model driven by digital trading and price signals. Octopus Energy’s CEO Greg Jackson highlighted the significance of entering China, the world’s largest energy market, and underscored the potential for both technical innovation and economic growth in both countries. [para. 4][para. 5][para. 6][para. 7][para. 8]

3. China’s rapid renewable energy expansion has resulted in operational challenges, such as excess solar output during periods of low demand and increased “curtailment”—wasted electricity that the grid can’t absorb. These issues have compelled Chinese regulators to accelerate power market reforms. In February, China’s main economic and energy regulators issued “Document No. 136,” ending mandatory purchases of excess renewable electricity and requiring developers to sell surplus energy on the market from 2024 onward. As the market becomes more competitive, profits increasingly depend on dynamic price forecasting and advanced trading, rather than simply buying low and selling high. [para. 9][para. 10][para. 11][para. 12]

4. Bitong Energy’s strategy is to deploy AI-driven forecasting tools to predict power prices, weather-driven generation, and demand patterns. These technologies will enable supply and demand matching across different time horizons, from long-term contracts to day-ahead trading. Octopus Energy is the U.K.’s largest energy supplier, holding approximately 24% of the market, and operates in 26 countries. The complexity of China’s residential electricity sector, similar to mature European markets, presents an opportunity for Octopus’s sophisticated technology. China’s vast electricity consumption, exceeding 10 trillion kilowatt-hours in 2025—more than double that of the U.S.—provides significant room for growth as market liberalization continues. Historically, foreign utilities have had limited direct involvement in China’s electricity trading market. [para. 13][para. 14][para. 15][para. 16]

5. The joint venture will initially focus on three key areas: virtual power plants (VPPs), aggregated power trading, and electricity sales. VPPs will use software to coordinate diverse energy assets, such as solar panels, batteries, and electric vehicles, to act like a single power station. Bitong Energy plans to earn revenue through aggregation spreads, trading profits, and continuous market repositioning known as “rolling matching.” Operations will start in Guangdong province, the country's largest power consumer, and expand to other provinces as spot markets mature. PCG Power’s customers include major industrial sectors, and the partnership’s advanced trading tools are expected to enable riskier renewable investments and position the new venture as a model for similar emerging markets globally, such as Indonesia and the Middle East. [para. 17][para. 18][para. 19][para. 20][para. 21][para. 22][para. 23][para. 24][para. 25][para. 26]