China’s two grid companies (State Grid and Southern Grid) have announced RMB 140bn in special bonds to narrow the funding gap for renewable subsidies. Even as the Chinese government gradually phases out renewable energy subsidies, the available funds for paying out subsidies continue to run a deficit that is projected to reach RMB 300bn by the end of 2020. The bonds are a first step to soothe this shortage, but probably further measures will become necessary because the government so far does not intend to increase the current renewable energy surcharge from RMB 0.51/kWh to raise additional funds. Some have stressed the importance of reliable subsidy payments: Mr. Qin Haiyan, Secretary-General of the Chinese Wind Energy Association (CWEA), has warned that feed-in tariff payment delays for renewable energy could result in financial difficulties for companies in the industry and a loss of investor confidence. This move contributes to reassuring the market.
At the same time, the capacity for newly published subsidy-free renewable energy projects for 2020 has doubled compared to 2019 – 11.4 GW of wind power and 33.05 GW of solar PV were announced by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) on July 31, 2020. The document foresees that subsidy-free projects published in 2019 and 2020 should receive approval and begin construction by 2021.
Sources:
Bonds: https://mp.weixin.qq.com/s/273O742MBKaSEMYc8exeTw
Subsidy-free renewable energy projects: https://www.ndrc.gov.cn/xxgk/jd/jd/202008/t20200805_1235591.html; https://www.ndrc.gov.cn/xxgk/zcfb/tz/202008/t20200805_1235592.html
