China to end government subsidies for onshore wind power generation projects by 2021, state planning agency says
- China to cut subsidies to zero as development costs fall
- Solar sector likely to follow soon, industry executive said
China will end subsidies for new onshore wind power projects at the start of 2021, with renewable projects set to compete on an equal footing with coal- and gas-fired electricity, the country’s state planning agency said on Friday.
The move is a milestone for the renewable energy sector, which has traditionally relied on subsidies and other preferential policies to encourage developers to build plants.
China pays a relatively high tariff per kilowatt hour (kWh) of electricity produced by wind or solar projects, but it has been promoting what is known as ‘grid price parity’ with traditional sources of power such as coal.
The National Development and Reform Commission (NDRC) said tariffs paid to onshore wind projects will be cut to as low as 0.29 yuan (US$0.0420) per kWh in 2020, while grid price parity will apply to all new projects from January 1 2021.
It said the tariff adjustments beginning this year were designed to ensure wind power could reach the same price level as coal-fired power and also promote fair competition in the sector.
China has been scaling back subsidies for both wind and solar projects after a rapid fall in equipment and construction costs, as well as a huge subsidy payment backlog for existing projects.
The country’s energy regulator said last year that it would make an extra push to provide technological and policy support to the renewables sector to ensure it can operate subsidy-free.