Industrial policy of new energy power generation in China

Industrial policy of new energy power generation in China

The Chinese government also attaches great importance to the development of the new energy industry. It regards it as one of the strategic emerging industries in the 21st century, and has introduced many industrial policies in the fields of photovoltaics, wind power, and biomass to promote the development of the industry.

1. Photovoltaic

In general, the current national photovoltaic industry policy system mainly includes three parts: planning policies, support policies, and restraint and supervision policies.

(1) Planning policies. In recent years, the National Development and Reform Commission and others have successively promulgated documents such as the “Twelfth Five-Year Plan for Renewable Energy Development” and “Medium and Long-term Development Plan for Renewable Energy” to clarify and plan the development goals and direction of China’s photovoltaic industry. And according to the actual situation of industrial development, through the formulation of policy documents to make timely adjustments to the previously formulated development goals and directions.

(2) Supporting policies. Supporting policies include the “Interim Measures for the Administration of the Collection and Use of the Renewable Energy Development Fund”, photovoltaic concession project bidding, “Golden Sun Demonstration Project”, “Solar Photovoltaic Building Application Demonstration” project, feed-in tariff policy, etc.

(3) Constraint supervision policy. The Ministry of Industry and Information Technology and others have issued restrictive policies such as “Polysilicon Industry Access Conditions”, advocating orderly competition and reducing capacity accumulation.

2. Wind power

The Chinese government’s policy support and supervision on wind power are relatively strong. In July 2005, the National Development and Reform Commission issued the “Notice on Wind Power Construction Management Relevant Requirements”, requiring that wind farms that do not meet the localization rate of 70% are not allowed to be constructed, and imported equipment must be taxed in accordance with regulations. In July 2007, the “Fourth Phase of Wind Power Concession Bidding” stipulated that each bidder must have a wind power equipment manufacturer to participate, and the wind power equipment manufacturers must provide the tenderee with a letter of commitment to ensure that the supply of wind turbines meets the 75% localization rate. In August 2008, the Ministry of Finance issued the “Interim Measures for the Management of Special Funds for the Industrialization of Wind Power Equipment” to subsidize the first 50 megawatt-class wind turbines of eligible companies at a rate of 600 yuan/kW. Among them, complete machine manufacturing companies and key parts manufacturing companies each account for 50%, and focus on weak links in key parts, and subsidies are mainly used for new product research and development. In July 2009, the National Development and Reform Commission issued the “Notice on Improving the Policy for Wind Power On-grid Tariffs” and decided to divide the country into four types of wind energy resource areas and set benchmark on-grid tariffs for wind power at 0.51 yuan, 0.54 yuan, 0.58 yuan, 0.61 Yuan per kWh. In March 2012, the Ministry of Science and Technology issued the “Twelfth Five-Year Plan for the Development of Wind Power Technology”, which made deployment arrangements for China’s wind power technology development during the “Twelfth Five-Year Plan” period. In June 2012, the National Energy Administration issued the “Notice on Relevant Requirements for Strengthening the Grid Connection and Consumption of Wind Power”, and made arrangements for China’s increasingly serious wind abandonment problem.

3. Biomass energy

The Chinese government has also attached great importance to the development of biomass energy. In January 2006, the National Development and Reform Commission issued the “Trial Measures for the Management of Renewable Energy Power Generation Prices and Cost Sharing”. It is pointed out that “on-grid electricity prices for biomass power generation projects shall be set by the government, and the price authority of the State Council shall set benchmark electricity prices by region. The subsidized electricity price standard is 0.25 yuan per kilowatt hour. Power generation projects will enjoy subsidized electricity prices within 15 years from the date of commissioning; after 15 years of operation, the subsidized electricity price will be cancelled.”

In January 2007, the National Development and Reform Commission issued the “Interim Measures for the Allocation of Additional Revenue from Renewable Energy Price”. It is pointed out that “for biomass power generation companies that do not mix with other fuels, the provincial power grid companies will settle their electricity charges with the power generation companies based on their actual grid power and the on-grid tariff approved by the pricing authority of the State Council; for biomass power generation companies that burn other fuels, provincial-level power grid companies will settle electricity charges with power generation companies based on the on-grid electricity and on-grid tariffs approved by the pricing authority of the State Council.” In March 2007, the Ministry of Agriculture issued the “National Rural Biogas Project Construction Plan (2006~2010)”, which proposed that during the “Eleventh Five-Year Plan” period, 23 million rural households will be newly built with biogas, and 4,000 large and medium-sized biogas projects will be built in large-scale breeding farms. In May 2007, the Ministry of Agriculture issued the “Agricultural Biomass Energy Industry Development Plan (2007~2015)”, which pointed out the direction for the development of agricultural biomass energy.

In June 2009, the General Office of the State Council promulgated the “Several Policies to Promote the Accelerated Development of the Biological Industry”, which proposed a series of policy measures including increasing fiscal and taxation support and actively expanding financing channels. In July 2010, the National Development and Reform Commission issued the “Notice on Improving the Price Policy for Agricultural and Forestry Biomass Power Generation”, stating that the agricultural and forestry biomass power generation projects are based on a unified grid-connected benchmark price of 0.75 yuan per kilowatt-hour.

In June 2012, the Ministry of Science and Technology issued the “Twelfth Five-Year Key Special Plan for Biomass Energy Technology Development”, which put forward the overall thinking, development goals, and development tasks for China’s biomass energy technology development during the “Twelfth Five-Year Plan” period.

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