China enters 18-month transition to subsidy-free solar
release date:2019-04-11     article source: PV Magazine-MAX HALL     views:638    share:

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China’s National Energy Administration (NEA) has published its roadmap for an 18-month transition to .

The Work Plan for the Construction of Unsubsidized (Grid-Parity) Projects for Wind & Solar PV consultation paper released by the NEA yesterday is the result of  between the Beijing authorities and solar industry stakeholders in the Chinese capital.

The emphasis on prioritizing PV projects that operate without central subsidies is clear, with the NEA making only vague noises about its intent to establish a  “in the months ahead”, according to Chinese consultancy AECEA, which has reported the contents of the consultation paper.

According to AECEA, there will be a freeze on bidding rounds for subsidized PV projects until the first batch of unsubsidized schemes is dealt with. Under the terms of the consultation paper – which applies until the end of next year, to run alongside China’s 13th Five-year Plan – details of the first round of unsubsidized ‘grid-parity’ schemes must be submitted to national authorities by April 25.

Abolish or reapply

When that deadline expires, in two weeks’ time, priority will be given to historic projects which were secured in the expectation of FIT payments but which opt to become grid-parity facilities. After those, new grid-parity schemes will be considered and subsidized projects will be given “last” priority, reported AECEA. Details of subsidized PV projects have a deadline of May 31 for submission to the authorities.

Projects which have yet to start construction two years after securing approval – or within any previously agreed extension period – must either resubmit their bid applications under the new regime or be abolished, with AECEA estimating 7.8 GW of such projects face that decision under the quota system plus a further 32 GW of capacity outside the quota.

AECEA states the success of the grid-parity policy push will hinge on the ability of China’s state-owned grid companies – the State Grid Corporation and the China Southern Power Grid Corporation – to guarantee transmission and consumption of all the solar power generated by subsidy-free projects under PPAs of at least 20-year durations, a commitment they and other grid operators are bound to by the consultation paper.

Transition period

The analysts also report the policy document announces the NEA intends to finalize the details of its previously trailed green electricity certificate program by the end of June. The renewable obligation scheme has been  as another key factor in the push for grid parity solar.

AECEA warns the disruptive nature of the new policy announcement will make it impossible to reliably estimate how much solar capacity will be added in China this year, with current estimates hovering around the 40 GW mark. The analyst states the consultation paper stakes out the territory for a Chinese solar market comprising grid-parity and subsidized PV until the end of next year, ahead of a hoped-for  onwards.