The National Development and Reform Commission promulgated the 'Renewable Energy Power Quota and Assessment Method (Second Consultation Draft)'. After the first consultation in late March, it re-examined the opinion after half a year. The renewable energy quota system came to an end and set off a new industry. A round of discussion boom, it is generally believed that strengthening the binding responsibilities and obligations of local governments, power companies, power grid companies, distribution companies, power users and other entities will undoubtedly give rise to the escalation of trade friction between China and the United States, and the gradual approach of PV parity. The renewable energy industry under multiple pressures, such as the elimination of hidden dangers and the acceleration of subsidies, has brought new impetus and new opportunities.
First, the lack of quota system is constrained by the high-quality development of renewable energy
At present, China has become the largest renewable energy country. The installed capacity of hydropower, wind power and photovoltaic power generation ranks first in the world. Renewable energy power generation accounts for nearly 37% of the total installed capacity of power. However, the overall utilization efficiency still needs to be improved. The proportion is only 26%, of which non-water renewable energy generation accounts for less than 8%. The bottleneck of the further development of renewable energy power has changed from the constraints of technical equipment and development and construction capacity in the past to market and institutional constraints, which is highlighted by the current difficulties in grid access and market consumption for hydropower, wind power and solar power generation. In some areas, there are serious “three abandonment” (abandonment of water, abandonment of wind, and abandonment of light), the establishment and implementation of a renewable energy quota system, and the proportion of renewable energy in power consumption as a binding indicator, giving priority to development and full utilization. Renewable energy is not only related to the healthy and orderly development of the industry, but also an important part of promoting the national energy consumption and production revolution.
From the experience of the United States, Britain, Australia, Germany, Japan and other countries, the implementation of the quota system can play a huge role in promoting the development of renewable energy. In the United States, for example, among the 38 states that have implemented quota systems since 2000, the amount of new renewable energy generated accounts for 60% of the country. It is precisely because of the implementation of the quota system that the United States provides 20% of the total capacity of renewable energy, providing a proportion of more than 17% of the power generation, renewable energy utilization efficiency is much higher than China.
Second, the quota system has been twisted and twisted.
As early as 2009, the renewable energy quota system was formally proposed. Since then, it has been publicly solicited for many times, but it has been difficult to have a substantial landing. It can be said that it is full of twists and turns. With the acceleration of the low-carbon transformation of China's energy structure and the technological advancement and large-scale development of renewable energy, the voice of the quota system has become stronger and stronger.
On February 29, 2016, the National Energy Administration issued the “Guiding Opinions on Establishing a Target Guidance System for the Development and Utilization of Renewable Energy”, which stipulates the non-hydropower renewable energy power ratio indicators for the whole society in 2020. But unfortunately, this target is a policy-oriented indicator and is not binding.
In February 2017, the three ministries jointly issued the “Notice on Trial Implementation of Renewable Energy Green Power Certificate Issuance and Voluntary Subscription System” to determine the trial and implementation of green energy certificate and voluntary subscription for renewable energy in the country, and plans to start renewable energy in due course. Green certificate (referred to as 'green card') market mandatory transaction. Subsequently, the green card issuance and the voluntary subscription transaction are officially piloted. The subscription transaction is called a policy test, and paves the way for the next upcoming quota system.
On March 23, 2018, the National Energy Administration issued the “Measures for the Assessment of Renewable Power Energy and Power Quotas (Draft for Comment)”, clearly setting the quotas for renewable energy power quotas and non-hydropower that need to be realized in each province in 2018 and 2020. The quota indicator indicates that the national plan to promote the proportion of renewable energy power consumption from general policy guidance to provincial-level binding indicators.
At the end of June 2018, the National Energy Administration originally planned to publicly release the second draft of the quota system. This undisclosed draft for comment in the industry proposes that the amount of renewable energy generated beyond the utilization hours will no longer be subsidized. The incremental income from the sale of the green certificate by the power generation enterprise shall not exceed the original subsidy amount. This new regulation means that the external benefits that renewable energy companies can obtain are greatly reduced, and enterprises will also face the problem of realizing difficulties. Coupled with other objections, the draft was eventually forced to cancel.
Recently, a new round of drafts of the quota system was issued and the relevant objections were improved. The pace of the quota system was further advanced.
Third, the current round of soliciting opinions, the quota system is expected to accelerate implementation
Compared with the first draft for comments, this round of consultation drafts has undergone several major changes, as follows:
The six categories of quota obligations are clarified. Including: 1. State Grid Corporation, the provincial power company of China Southern Power Grid Corporation; 2. Local power grid enterprises owned by local people's governments at or below the provincial level; 3. Power sales companies with distribution network operation rights (referred to as distribution power companies, Including social capital investment incremental distribution network operation enterprises); 4, independent sales companies (do not have the right to operate the distribution network, do not undertake the guarantee power supply services); 5, participate in the direct electricity transactions of electricity users; 6, have their own The power plant enterprises (all electricity consumption is met by self-sufficient renewable energy power generation without the need to bear the quota obligation).
The calculation method for the completion of quotas by each obligatory entity is clarified. The quotas to be completed by the first to fourth types of quota obligations are the sales volume multiplied by the provincial administrative region quota indicator; the category 5 entity should complete the quota for all purchased electricity and spontaneous self-use electricity (if any). And multiply by the provincial-level administrative region quota indicator; the category 6 entity should complete the quota for its own power generation and the net purchase of electricity through the public grid multiplied by the provincial-level administrative region quota indicators. Among the electricity sales and electricity consumption of each quota obligation entity, the heating power for agricultural electricity and grid enterprises is exempt from quota assessment.
Reshaped the renewable energy green card trading rules. In the new round of consultation drafts, the Green Card is a unit of measurement for renewable energy power production, consumption, trading, quota monitoring and accounting assessment. The assessment of the quota completion of each quota obligation entity is conducted by means of accounting for the green certificate. For the green certificate transaction, the corresponding rules have also been revised in this round of consultation draft.
The first is to expand the coverage of the green card. This round of consultation drafts stipulates that a renewable energy green certificate will be issued for hydropower, and a non-hydropower green certificate will be issued for non-hydropower renewable energy. The former is only used for the total quota assessment, while the latter is used for the non-hydropower quota assessment and for the total quota assessment. The green certificates discussed in the past are often limited to wind power and photovoltaic power generation projects. Hydropower projects issue hydropower certificates, and this round of green certificates is for all renewable energy sources.
The second is to clarify the relationship between green certificates and subsidies. This round of consultation drafts pointed out that the green card transaction price is formed by market transactions. When the National Renewable Energy Development Fund allocates subsidy funds to power generation enterprises, the green certificate transaction income is deducted according to the principle of equal replacement. This means that for the renewable energy power generation projects in the existing plan, regardless of the success of the green certificate transaction, the national subsidy for this part of renewable energy power will not be less. In the future, new renewable energy power generation projects that no longer enjoy the subsidy of fixed electricity prices will replace the original renewable energy tariffs with additional funds through the green certificate transaction as an additional source of income.
Third, the mandatory amortization becomes a quota compensation. This round of consultation drafts stipulates that the main body of the obligation that has not completed the annual quota needs to pay the quota compensation for the difference. The compensation standard is the sum of the on-grid price of local coal-fired power generation, the highest transmission and distribution price of large industrial users (1-l0kV users), government funds, surcharges and policy cross-subsidies, and the amount will be far greater than the cost of purchasing green certificates. From this, it can be seen that the quota compensation has been punitive.
Fourth, the quota system will effectively solve the pain points of the renewable energy industry
At present, the issue of subsidies and subsidies is the two major pain points in China's renewable energy industry. With the difficulty of consumption and the widening of the subsidy gap, the implementation of the mandatory quota system and the green certificate is undoubtedly a good news for the renewable energy power generation industry.