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11 June 2018
On 3 April 2018 the National Energy Administration (NEA) issued the Interim Administrative Measures for the Development and Construction of Distributed Wind Power Projects (NEA Order 30). The measures took effect on their date of issuance and are valid for five years.
The measures aim to simplify the approval and development process for wind power projects established in the Interim Measures for Distributed Power Generation, which the National Development and Reform Committee published in 2013. In this respect, the NEA published the Draft Regulation on Distributed Power Generation for public consultation on 20 March 2018.
The measures further optimise the development and construction policies concerning distributed wind power projects with regard to:
It is hoped that the measures will accelerate distributed wind power development and construction in China.
As the focus of wind power development in China shifts to the eastern and middle regions, distributed development is emerging as the main model. As such, the relevant authorities have successively issued numerous supporting documents for distributed wind power development since 2011.
In July 2011 the NEA issued its Notice on Distributed Access Wind Power Development, which:
The NEA's notice clarified the main ideas and limits for distributed wind power development in China for the first time, and corresponding arrangements were made for distributed wind power development work. However, a lack of specific provisions regulating the development and construction of distributed wind power projects remained.
In December 2011 the NEA promulgated its Guidelines on the Development and Construction of Distributed Access Wind Power Projects, which included provisions on:
On 26 February 2018 the NEA issued the Circular about the Guidelines on Energy Work in 2018, indicating that China will:
As matters stand, the rapid development of distributed wind power rapidly requires a number of practical problems to be resolved, including:
Focusing on these problems, the new measures promote:
In addition, the new measures include several favourable policies for distributed wind power projects.
The key elements of the measures, which comprise seven chapters and 35 articles, are as follows.
More specific requirements for grid access work
The previous voltage level of 35 kilovolts and below has been expanded to 110 kilovolts and below, which will enable distributed wind power plants to have a larger acceptance range and a wider installed space. Grid companies should provide favourable conditions for distributed wind power projects and establish green channels for access system engineering. The measures also include specific requirements for grid companies to avoid wrangling.
The measures specify the distributed wind power development planning process and include detailed requirements in this respect. Grid companies at all levels must actively cooperate with distributed wind power plant development and construction, including by:
Areas with good conditions for distributed power development should compile special plans for the access and consumption of new energy power. Environmental impact assessments should be produced, along with distributed wind power plans. In particular, the measures emphasise that a distributed wind power development and construction plan should be formulated in strict accordance with the Guidance on the Implementation of the 13th Five-Year Plan for Renewable Energy Development. Expanding the scale of distributed wind power construction should be treated with caution.
Simplified management process
The approval of distributed wind power projects will shift from pre-approval to post-regulation supervision. The government's role will also shift from managing projects to providing services. For the first time, a pilot project approval system has been encouraged, under which local energy authorities will not review the pre-requisites. Instead, companies will submit a project application report and credit commitments in accordance with the relevant requirements, in which they must confirm that the project complies with the relevant industrial policies and regulations and that bid activities have been carried out legally. The project will be approved after it has been reviewed and approved by the local energy authorities. The measures also state that all local governments should establish a one-stop-shop service system and encourage developers to bundle wind turbines of multiple grid access points located in the same county into one project in order to carry out the preliminary work and apply for the relevant supporting documents.
Various measures to resolve financing problems
The measures encourage all types of enterprise, social organisation, rural collective economic organisation and individual to invest in distributed wind power projects in order to achieve investor diversification. Other initiatives to expand funding sources include:
More flexible grid connection and better subsidy allocation process
When distributed wind power developers apply for approval, they can choose a mode of spontaneous self-use, redundant power-on-grid or full-on-line access. Some self-use power will not be subsidised by the National Renewable Energy Development Fund; instead, grid load will be purchased by grid companies according to the local benchmark prices of wind power. The measures also specify that the state's policies and regulations on distributed generation apply to distributed wind power projects, which means that distributed wind power projects can be involved in market transactions and sell electricity to other industrial and commercial users. Electricity generated from distributed wind farms will receive government subsidies. The measures require grid companies to:
Special emphasis is placed on subsidies for distributed wind power projects that have not been strictly constructed in accordance with the technical requirements. In this case, subsidies are not available.
Reducing land restrictions
For the first time, the measures clarify that project developers can build or rent land to build distributed wind power projects. However, basic farmlands cannot be used for project development.
The development of distributed wind power will help to:
The NEA's new measures have removed institutional obstacles and addressed in detail the required resources and technical conditions for distributed wind power development. The industry must now take action and increase its investment into distributed wind power so that it can become the major source of wind power development in China.
For further information on this topic please contact Huayan Liao at Broad & Bright by telephone (+86 10 8513 1818) or email (firstname.lastname@example.org). The Broad & Bright website can be accessed at www.broadbright.com.
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