Energy Economy

25 Nov 2019

China to Slash Renewables Subsidies by 30%

25 Nov 2019  by Asian Power   

Government incentives will fall from $1.15b in 2019 to $807m in 2020.

The government of China has decided to reduce renewable power subsidies by 30%, from $1.15b in 2019 to $807m in 2020. In 2020, around 52% of the subsidy will go to wind projects ($422m), 47% to solar parks ($374m) and 1% to biomass plants ($10m). China is phasing out public support to renewable power plants, as the fall in manufacturing costs is helping renewable projects to achieve grid parity with coal-fired power plants and to compete with them. Subsidies for large solar power plants will be phased out soon and subsidies for new onshore wind projects could be removed at the end of 2021, in an attempt to reduce a subsidy payment backlog of at least $17b.

In January 2019, the NDRC unveiled new solar and wind policies for the development of future subsidy-free projects. The renewable projects will generate power at the same price as non-subsidized coal-fired power plants and will not have to comply with any quota restrictions. However, wind and solar projects will receive governmental support on land and financing. Consequently, in May 2019, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) of China approved 250 renewable power projects totalling 20,760 MW in 16 provinces that will be developed without subsidy. Most of the projects (168) will be solar PV projects, for a total capacity of 14,780 MW, followed by 56 wind projects (4,510 MW) and 26 "distributed trading pilot projects" (1,470 MW).

More News