1. China Renewable Energy Law and Development Plan
APEC renewable energy experts group meeting
China Renewable Energy Law and Development Plan
Li Junfeng
Energy Research Institute &
China Renewable Energy Industry Association
October 9-11, 2006
Zhuhai, China

2. Outline China Renewable Energy Law
Implementation regulations under the law
China Renewable Energy Development Plan
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3. China Renewable Energy Law
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4. Milestones
In June 2003, the draft was listed in the legislation plan by National People’s Congress
On Feb 28th 2005, approved by National People’s Congress
Effective on Jan 1st, 2006
On Jan. 12th, a news-release meeting was held for announce the effective of the Law and implementation regulations
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5. Mechanisms classified in the RE Law
Establishing national targets
Grid connection priorities
Classifying tariffs for Renewable Power
Sharing cost at national level
Renewable energy special fund
Policy on favorable credit and favorable tax treatment
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6. Implementation Regulations Under RE Law
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7. Milestones
On April 5th 2005, 6 commissions and ministries of National People’s Congress and State Council organized Meeting on Implementation of RE Law jointly
Definite 12 tasks for regulations’ formulation
Agreement achieved: major regulations would be issued by the end of year 2005
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8. Tasks for regulations’ formulation
(1)Make the decision for hydro power how to be applicable for the RE Law
(2)Study and establish the technology criterions for renewable energy resource investigation
(3)Study and establish national middle and long-term target of the total volume for the development and utilization of renewable energy. In second paragraph, the related departments of the State Council with the local people’s government of province, municipality and the municipality directly under the Central Government develop the local renewable energy development middle and long-term target
(4)Develop the national plan for the development and utilization of renewable energy. The Energy Authority of the local people’s government of province, municipality and the municipality directly under the Central Government is responsible for the local plan of the development and utilization of renewable energy
(5)Study and establish the Guide Lines for the Renewable Energy Industry Development
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9. Tasks for regulations’ formulation(2)
(6)Study and establish the technology standards on renewable energy power grid connection and other national standards on renewable energy technology and product which need uniform requirement in the national level
(7)Study and establish the economic technology policies and technical criterions on integrating building with the solar utilization system
(8)Study and establish the concrete methods for providing financial supports to the related renewable energy utilization projects in rural regions
(9)Study and establish the grid connecting electricity price for the renewable energy power generating projects
(10)Study and establish the concrete method for the national cost sharing to the grid connecting electricity payments for the renewable energy power generating projects
(11)Study and establish the management method for the Renewable Energy Development Special Fund
(12)Study and establish the concrete methods on interest subsidy from finance and favorable revenue for renewable energy
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10. Regulations issued Issued so far To be issued in 2006
Regulation and Management Measure of RE power
Regulation on Renewable Power Pricing and Costing Sharing
Guideline of RE industry development (technology catalogue)
Some national standards (such as solar building standard, PV power grid connection standard etc.)
Regulation on Special RE Fund
To be issued in 2006
National Middle and Long-term Strategy for Renewable Energy Development and 11th-five-year Renewable Energy Development Plan (has been submitted to the State Council)
Solar Building Economic Policy etc.
Effective:
Definite the national target, key projects and their distributions
Giving a sound signal
In drafting or preparing
Financing policies (tax, loan etc.)
Other national standards to be improved
Resource survey etc.
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11. Regulation and Management Measure of RE Power Generation
Effective
Overcome the barrier of grid-connection for renewable power
Power-grid companies must provide the service for renewable power grid-connection
Overcome the barrier of renewable power generators selling RE power and price
Power-grid companies must purchase RE power with the tariff of Government Fixed Price
Overcome the barrier of power-grid companies paying the cost of grid-extension for RE power generation
Cost for grid extension for RE power generation is included in the scope of nationwide cost sharing
Regulated that hydropower is included
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12. Regulation on Renewable Power Pricing and Costing Sharing(1)
For Renewable power’s pricing
Define the principle for renewable power pricing
The IRR of renewable power project should be more than the average IRR of conventional energy power project
Government fix price and Government guiding price (tender price)
Regulate the prices for different renewable power technologies
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13. Regulation on Renewable Power Pricing and Costing Sharing(2)
Price for Wind Power: tender price
Implementing Government Guiding Price, possibly
Before 30,000 hours, adopt Tender Power Price
After 30,000 hours, RE power subsidy price will be cancelled
Effective and questions
For large wind power projects, tender power pricing is effective
How to handle the price issue of small wind power projects:still unclear
Questions: tariff level is not a fix level for all project nationwide
Increase the risk for project development
Increase the difficulty for financing, especially for small scale project developer
Rising the input on personnel and capital in preparation stage, as a result increase the cost of the whole project
Low price level restricts the development of manufacturing
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14. Regulation on Renewable Power Pricing and Costing Sharing(3)
Price for biomass power: feed-in-tariff
Coal fire plant plus 0.25Yuan/kWh, the range of biomass for power will be about fen per kWh
In the first 15 years, adopt the subsidy Price
After first 15 years, RE power subsidy price will be cancelled
Bi-fuel and multi-fuel biomass power projects, if the conventional energy contribute over 20%, are taken as conventional energy power projects, and not available for RE power subsidy price
Effect
A long-term PPA provided and fixed price
Easy for financial and economic assessment for projects
Problem: Whether current price for biomass power is reasonable for all technologies of biomass power
all technologies have same price in a certain province
MSW and landfill gas: with relative large benefit
Strew, stalk, wood residue for power: uncertain profit rate, (decided by cost of fuel)
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15. Regulation on Renewable Power Pricing and Costing Sharing(4)
Price of solar, geothermal and ocean power
Government approval price
Determine power price levels according to detail
Price determination principle: cost plus rational benefit
Payback rate should be similar with that of wind/biomass power projects
Most are demo projects
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16. Regulation on Renewable Power Pricing and Costing Sharing(5)
Cost Sharing for Renewable Energy Power
All the end-users should share the extra cost, include:
Extra cost of gird renewable energy power
Operational cost of off gird renewable power (government invested)
Cost for grid extension for RE power generation
A surcharge will be collected by gird to cover the cost
Gird will play a key role in the system
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17. Regulation on Renewable Power Pricing and Costing Sharing(6)
Implementation for Cost Sharing
Grid company collect Renewable Power surcharge
Tax free for surcharge
Unify adjusting among provincial power-grid companies
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18. Policy Framework Under the RE Law- giving good opportunity for RE development
Quota for large scale electricity producer
Tariff of bidding
National RE development plan
RE electricity
Grid Company
Electricity producers from RE
National RE development goals
Tariff of RE products with fixed price
End User
RE consumption
Other RE products (Gas, thermal and liquid fuel)
Suppliers for gas, thermal and liquid fuel
Provincial RE development plan
Non-electricity producers from RE
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19. China Renewable Energy Development Plan
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20. Progress
Started drafting in 2004, simultaneously with the drafting of China RE Law
Has been submitted to State Council
To be issued in 2006
The targets of RE development in 2010 and 2020
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21. Targets RE technology 2005 2010 2020 Hydropower(GW) 117 180 300
Wind power(GW)
1.26 5 30
PV(MW) 70
1800
Biomass power(GW) 2
5.5
Other RE power (MW) 25 50
100
Bio-fuel(Mt)
112
220
1200
Biogas(Gm3)
8.5 19 44
Solar water heater (Mm2) 80
150
Total RE (Mtce)
148
273
544
Percentage of RE 8%
10%
16%
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22. Strategies for Wind Conditions to meet national targets Cost Reduction
Market to stimulating
the financing
Grid Connection ；
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23. Establishment of Stable Market for Wind
Enhance building on standards for technology improvement and keeping stable market
Grid construction
Wind power grid-connection standard
Power grid improvement and extension plan for wind power
Key technologies of wind power grid connection
Technologies of short-term prediction of wind power generation
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24. Establishment of Stable Market for Wind
Key issue: pricing
Large wind farms plan: from , the tender projects from government:
From , 0.5-1GW per year
From , 1-1.5GW per year
Wind power cost reduction
New technology
Quality control
Running and maintenance cost
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25. Strategies for Biomass
Government’s role
Resource: energy crop
tax and subsidy
Market access: mandatory measure
grid integration (regulation issued)
certification for biofuel for entering fuel sale systems
Marketing strategy: attracting investment
biopower
biofuel
pellet
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26. Strategies for PV PV Industry Chain in 2005 Hot points from Government
The top and bottom
Bottom: raw material and silicon block
Top: market and technology deployment
roof PV
PV grid-connected systems
in deserts
mandatory measure
Market Strategy
private sector’s role
(major)
PV Industry Chain in 2005
Item
Raw materials
Silicon block
wafer
cell
Module MW 12
225
200
270
400
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27. Energy Research Institute & China Renewable Industry Association
Thanks for attention
Li Junfneg
Energy Research Institute & China Renewable Industry Association
&
2019/4/9