Implementing Regulations

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The Law outlines general principles which are then detailed in implementing regulations. The Chinese government recognizes that policy-making is an iterative process and has established "trial" measures for pricing that may be reviewed and revised.

In early 2006, implementing regulations regarding administrative and pricing provisions were issued. These include project approvals by NDRC for large hydropower (for 250 MW facilities and larger) and wind power plants (for 50 MW facilities and larger). Power grids are responsible for interconnection of renewable energy power plants. Two forms of pricing are proposed: fixed pricing and pricing based on a public tendering process. Biomass will receive a US$0.03/kWh subsidy for 15 years over and above the 2005 desulfurized coal power price of the province or region. Solar, ocean, and geothermal power will also receive fixed pricing based on "reasonable profits" which have not yet defined.

Wind power will receive a price based on public tendering. This is based on NDRC's wind concessions program which started in 2002 and has resulted in the awarding of long-term power purchase agreements to develop 1300 MW of wind power [9]. Winning bid prices have been in the range of US$0.05-0.06/kWh. Although tendering has proven successful in awarding contracts, it remains to be seen whether it will be successful in generating renewable energy, or whether China will follow the way of the U.K.'s Non-Fossil Fuel Obligation of the 1990s in which tendering resulted in many awarded projects that were never commissioned, likely due to underbidding [10]. As in other countries, such as the U.S., regional and local policies may be more progressive than national policies. In the case of Guangdong province, a winning wind concessions bid of US$0.061/kWh helped the local government justify and establish a feed-in tariff of US$0.064/kWh for all nonconcession wind projects in the province.

The Law also specifically supports the use of renewable energy for remote rural areas. In 2002, NDRC initiated the Township Electrification program to electrify those remaining 1061 townships that lack electricity with PV, wind, and small hydropower [11]. Approximately, US$340 million was spent on the PV- and wind-powered townships. NDRC is now expanding this program to the village level and will electrify those remaining 25-30 million people in the 20,000 villages which do not yet have electricity. The Village Electrification program will cost an estimated US$5 billion and will be implemented over the next ten years. These off-grid users will be cross-subsidized by the grid-connected users so that they will pay a tariff equivalent to the provincial grid price.

To fund the incremental costs of renewably generated power (above the provincial coal power price) as well as the operations and maintenance of the off-grid systems, a surcharge will be applied to all end users (except for those in Tibet and agricultural users) served by the grid.

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Renewable Energy Eco Friendly

Renewable Energy Eco Friendly

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable.

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