Why China’s costly “green energy certificate” has not helped cash-strapped renewable energy firms
China’s pilot “green energy certificate” trading scheme has not proven to be an effective replacement for hefty state subsidies. But things are expected to change when the scheme becomes compulsory next year
Three months after its launch, China’s first “green energy certificate” trading scheme has raised only 5 million yuan (US$800,000) for the country’s cash-strapped renewable energy companies, who are owed 75 billion yuan in government subsidies.
The figures, cited by Hou Yuhan, marketing director at the nation’s largest wind turbine producer Xinjiang Goldwind Science & Technology, highlight the challenges Beijing faces in balancing the interests of electricity consumers and producers while ensuring the nation meets its clean energy consumption target.
The voluntary “green certificate” trading and subsidy scheme is likely to require polluters, including coal-fired power generators, to buy “certificates” from renewable energy suppliers. Intended as an eventual replacement for subsidies paid to clean energy suppliers, the pilot programme was launched on July 1 to help ease the pressure on the government to implement frequent and unpopular power price increases to foot the ballooning subsidy bill.
“If we only rely on voluntary purchases, it could hardly play a significant role to fund our clean energy development aspirations,” she said.
Most voluntary purchases are by firms seeking to meet their own corporate social responsibility goals.
Kevin Gong Xu, a Shanghai-based senior energy procurement manager at Johnson Controls, a US energy efficiency products provider, said China’s green certificates can cost up to three times more than those in other markets, as sellers are only willing to accept small discounts to the subsidies they are owed.