In particular, financial subsidies and tax incentives for the development
of renewable energy sources -- including wind power, solar energy,
biomass, and others -- are in the enactment process, said Zhang Guobao,
vice director of the National Development and Reform Commission, at a
press conference on January 12.
Based on the "feed-in laws" that have been successful in advancing
renewables in Germany and other European nations, one new regulation
addresses the core issues of pricing and fee sharing for on-grid renewable
energy.
According to Xinhua News, the ruling stipulates two forms of renewables
pricing: a government-set price and a government-"guided" price. For
example, for biopower -- defined by China as energy derived from biomass,
or plants -- the government will set the price based on the provincial or
local on-grid price of desulfurized coal, plus a government subsidy of
0.25 yuan (US $0.03) per kWh. This subsidy will no longer be available
once a biomass project has been in operation for 15 years. For all
renewable power projects approved after 2010, the subsidy provided per kWh
generated will decrease at an annual rate of 2 percent.
For biomass projects, if the licensees are determined through a
competitive bidding process, the bid-winning price will be implemented
provided it does not exceed the local price of grid-connected power. The
on-grid price of wind power, too, will be set by State Council authorities
based on the bid-winning price. The price of solar, marine, and geothermal
power projects, meanwhile, will be determined on an "economic and
reasonable" basis.
The cost difference between on-grid renewable power and power from on-grid
desulfurized coal will be shared in the selling price at the provincial
and national levels.
The Chinese government endorsed the Renewable Energy Law in February 2005,
driven by a surging demand for energy as well as the desire for energy
security, pollution reduction and poverty alleviation.
Specifically, the law aims to boost China's renewable energy capacity to
15 percent by the year 2020 and outlines a commitment to invest $180
billion in renewable energy over this period. It sets the stage for the
widespread development of renewable energy in China, particularly for
commercial-scale electricity-generation facilities.
Other financial issues under discussion include a national fund to foster
renewable energy development as well as low-cost loans and tax breaks for
renewable energy projects.
Courtesy of Zijun Li, Worldwatch Institute
