Grid companies announce bonds to alleviate shortages in feed-in tariff fund

climate
Oct 26, 2020

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

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Sino-German Climate Partnership III

Project country
China
Political Partners
German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU); Ministry of Ecology and Environment of the People's Republic of China (MEE); National Energy Administration of the People's Republic of China (NEA)
Implementation Partners
Energy Research Institute of the National Development and Reform Commission of the People's Republic of China
Duration
09/2017 – 09/2020

Germany and China signed the Memorandum of Understanding on Cooperation in Combatting Climate Change and initiated this bilateral dialogue as "Sino-German Climate Partnership". The project has been established to support the cooperation between the German Ministry of Environment, Nature Conservation and Nuclear Safety (BMU) and the Chinese Ministry of Ecology and Environment (MEE). The new phase of the project starts in 2018 with close alignment to the restructuring at the Chinese government. In this phase, the project aims to advance the policy dialogue and cooperation with the Chinese partners domestically as well as within the international context of climate change. Part of the work will be supporting the development and implementation of China's medium- and long-term low-carbon development strategies, hence by supporting the Chinese government in strengthening the climate governance system. Domestically the SGCP project supports the policy dialogue on climate change (Sino-German Working Group on Climate Change) and enhances the exchange of German experiences and best practices, this includes strengthening capacities for the development of integrated climate and energy action plans as well as adaptation concepts for cities. On international level the SGCP project enhances the knowledge of both patterns about best practices in regard of climate policies and their implementation. For new cooperation topics identified by the Working Group on Climate Change, the project acts as an incubator for IKI development. As interface for information management, it serves a as a hub for exchange between partners of the IKI within and outside China, especially within the UNFCCC process.