China Urges Electricity Suppliers
to Buy 'Green' Power
Sep 10, 2007 - Ling Li -
RenewableEnergyAccess.com
 |
| Photo Credit: TDK |
Starting this month, China's State
Electricity Regulatory Commission (SERC) will assume
nationwide oversight over power companies that are
required under the country's renewable energy law
to prioritize purchases of the maximum amount of
'green' electricity available in their coverage
areas, according to a recent regulation released
by SERC. This renewable power includes energy generated
from sources such as hydropower, wind power, biomass,
solar power, tidal power, and geothermal energy.
| According to China's middle- and long-term
plan for renewable energy development, the share
of renewables used in primary energy consumption
is to be increased to roughly 10 percent by
2010 and nearly 16 percent by 2020, up from
some 7 percent in 2005. |
The regulation also details the authority,
measures, and responsibilities necessary for SERC
to facilitate the integration of renewable sources
into power systems. It allows all renewable power
facilities, with the exception of medium- and large-scale
hydropower plants, to receive government subsidies
in power pricing rather than having to participate
in competitive bidding.
China adopted its first law on renewable
energy in 2005 and has since issued several supplementary
rules and regulations to boost the use of renewable
energy. Yet renewable sources still account for
only a very small portion of domestic power supply,
mainly because of the high generation costs. The
cost of electricity generated from solar power,
for example, is some 3 yuan [US$ 0.39] per kilowatt-hour,
while that from a typical coal-fired power plant
is only around 0.22 yuan [US$0.028] per kWh.
A supplementary regulation on renewable
power pricing and cost sharing, authored by the
National Development and Reform Committee, has helped
break this cost bottleneck by requiring power suppliers
on the grid to purchase renewable electricity at
either a government-fixed or a government-directed
price. The additional cost of renewable energy is
to be borne by electricity users.
An extra "renewable energy" charge
of 0.001 yuan [US $0.00013] for every unit of electricity
has been added to household utility bills since
June 2006.
China's rapid economic growth relies
heavily on coal-fired power and poses a serious
challenge to the nation's energy supply as well
as to its natural resources and environmental quality.
The central government has recognized the importance
of promoting renewable energy as a fundamental national
strategy to achieve the dual goals of energy efficiency
and sustainable development.
According to China's middle- and long-term
plan for renewable energy development, the share
of renewables used in primary energy consumption
is to be increased to roughly 10 percent by 2010
and nearly 16 percent by 2020, up from some 7 percent
in 2005. "Green" electricity, meanwhile, is to account
for some 6 percent and 8 percent of the nation's
total power generation by 2010 and 2020, respectively.
The success of renewable energy typically
requires both government supports and market incentives,
according to some entrepreneurs in the power industry.
They argue that in addition to the current price
subsidy, the Chinese government needs to further
develop a mix of strong policies to encourage renewable
power generation, such as providing loans or tax
credits to green power producers.
This article first appeared in
ChinaWatch, a joint initiative of the Worldwatch
Institute and Beijing-based Global Environmental
Institute (GEI), and was reprinted with permission
from the Worldwatch Institute.
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