context: This policy is consistent with the central government’s long-term goal to gradually bring down state subsidies for renewable energy. It also sends a clear signal that the state will beef up its support for subsidy-free projects, following a 31 May solar power regulation that drastically cut project subsidies.

An unpublished draft of ‘Notice on accelerating wind and solar grid parity’ issued by National Energy Administration is circulating in media.

The policy stipulates

  • provincial energy agencies will oversee solar and wind projects that produce electricity at grid parity (at a price competitive with traditional energy sources like coal, or do not require government subsidy)
  • energy agencies at the provincial level or below should
    • optimise construction investment and operating environment
    • lower ‘non-technical costs’ including land prices, and financing and grid connection costs
    • enhance supervision and information disclosure
  • energy agencies at the provincial level or below are allowed to provide subsidy for a specified period to support the launch of the projects
  • on-grid tariffs for these projects can be set at the same level as power generated from local coal-fired power plants
  • provincial grid companies should sign long-term contracts with the power producers
  • grid companies should provide greater support for subsidy-free projects
  • local governments are encouraged to initiate pilot projects for direct power trading between power generators and end users, and on-grid tariffs for these projects will be negotiated by generators and users
  • provinces given a red alert, indicating high levels of curtailment, are prohibited to approve new solar or wind projects that produce electricity at grid parity