December 4, 2018 / 9:13 AM / 6 months ago

China to launch renewable power quota system by year-end

SHANGHAI (Reuters) - China will aim to launch a new renewable power quota system before the end of the year, the state planning agency said on Tuesday, part of efforts to make better use of its renewable energy resources and reduce waste.

The National Development and Reform Commission (NDRC) said in a new 2018-2020 plan for the clean electricity sector that it would work to cut renewable power wastage rates to 5 percent by 2020 from as high as 12 percent this year.

The new quota system will set minimum renewable power consumption targets for each region. Companies covered by the scheme will receive renewable energy certificates when they buy renewable power and will be forced to buy additional certificates if they fail to reach their targets.

Poor grid availability - known as “curtailment” - has been one of the biggest challenges facing China’s renewable sector, with regulators struggling to provide sufficient transmission capacity for the vast number of new wind, solar and hydro plants that have gone into operation across the country.

Though China’s solar and wind power capacity has been growing at a rapid pace, local transmission companies have sometimes been reluctant to take on costly and sometimes intermittent sources of electricity, and governments have also been accused of approving too many new projects and failing to secure grid access in advance.

The NDRC promised to create new mechanisms and price-setting policies, and would also implement a system that would force local governments to give renewable electricity sources priority access to the power market.

Industrial power consumers that possess their own “captive” power plants will also be forced to source a greater proportion of their electricity from local renewable sources.

It said it would also encourage local governments to be more flexible when it comes to securing long-term power supplies with local thermal power providers.

To prevent renewable power sources from being squeezed out by cheaper coal-fired power providers, China will also study ways for thermal and renewable power providers to cooperate under the direction of a unitary electricity dispatching unit, it said.

Reporting by David Stanway; Editing by Tom Hogue and Manolo Serapio Jr.

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