Renewable energy price subsidy program released

The China Electricity Regulatory Commission disclosed on December 5 that the SERC has issued the “Renewable Energy Price Subsidy and Quota Trading Program from October 2010 to April 2011” (hereinafter referred to as the “Programme”) jointly by the National Development and Reform Commission, and nearly 800 wind power stations across the country. The amount of subsidy for solar power generation and biomass power generation projects has been clarified: According to the difference in the amount of on-grid electricity, subsidized projects are as high as RMB 64.47 million, while those with less are only RMB 700,000.

In addition, the "plan" requires local price departments and power supervision departments to strengthen the regulation of the settlement of renewable energy tariff subsidies to ensure that renewable energy price surcharges are paid in full and on time. The issuance of the "plan" means that renewable energy power generators have finally waited for the subsidy for electricity prices two years ago. Before this, many power generators publicly complained that the subsidies for power generation were not in place, resulting in a high debt ratio of the company.

In 2007, China began to implement the "Trial Measures for the Management of Renewable Energy Power Generation and Cost Allocation", and at the end of each year, the National Development and Reform Commission and the China Electricity Regulatory Commission will publish electricity price subsidies and quota trading programs. Grid companies will pay additional power prices to related power companies according to this plan.

The electricity price subsidy period determined by the Electricity Regulatory Commission is from October 2010 to April 2011. Due to the funding gap, the previous subsidy will only be issued until October 2010. Previously, officials from the National Energy Administration revealed that the surcharge on electricity prices levied in 2011 was about 11 billion yuan, which is only enough to subsidize the approved new energy power generation enterprises from October 2010 to April 2011, and 7 after 2011. The monthly subsidy funds have not yet been implemented.

The “Proposal” requires provincial-level power grid enterprises that have surplus balances to clear the electricity price of renewable energy power generation projects within 10 working days from the date of issuance of this notice. We must resolutely correct and investigate the settlement of electricity tariffs in violation of the provisions of this Circular to ensure that the additional subsidies for renewable energy prices are paid in full and on time.

Previously, power generation operators, including Suntech, said that PV power plants have not received subsidies for three years since they were generating power. This is due to a huge gap in subsidies for renewable energy power generation. According to incomplete statistics, in 2009, the nation’s renewable energy price supplement subsidy gap was 1.3 billion yuan. In 2010, the gap was 2 billion yuan. By 2011, the gap has reached more than 10 billion yuan.