Beijing slaps quotas on regions’ non-hydro renewable energy consumption
Government wants non-fossil fuel to account for at least 15 per cent of energy consumption by 2020
Beijing has imposed long-awaited non-hydro renewable energy quotas on regional governments and the power distributors they own, which will help relieve worsening power grid bottlenecks and boost the sales of wind and solar energy firms.
The policy will also help meet Beijing’s goal for non-fossil fuel to account for at least 15 per cent of mainland China’s total energy consumption by 2020, rising to 20 per cent in 2030, as part of efforts to reduce air pollution. Last year’s ratio was 12 per cent.
The quotas aim “to achieve the requirements of the nation’s energy production and consumption revolution” and to promote renewable energy utilisation, the National Energy Administration (NEA) said on Thursday.
The quotas for the 31 provinces, autonomous regions and large municipalities range from 5 per cent to 13 per cent, depending on their energy consumption and production structure.
They will filter down to the state-owned grid operators, which by law were supposed to absorb all renewable energy produced. However, court challenges to non-compliant monopolies were almost unheard of.
Of course, the question is how implementable the quotas are; we expect more supplementary policy directives to be issued later
The mainland curtailment rate of wind farms – the percentage of output generated but wasted due to non-acceptance by the grids – surged to 15 per cent last year and Daiwa Capital Markets analysts forecast it could rise to 18 per cent to 20 per cent amid weak power demand growth and rising installed capacity of renewable, coal-fired and nuclear plants.