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According to the latest government mandate, having prospered for years thanks to state support, Chinese solar producers should be ready to compete with other sources of energy, in line with the government's mandate, while night falls at the time of heavy subsidies.
China turbocharged solar technology, also called photovoltaic, for much of the last decade by offering solar power stations generous prices for their energy, ensuring attractive returns for investors. But for the last year the government has suggested that it would reduce its role as he has trouble paying Artificially high prices set and solar technology became cheaper.
In the last step to lighten the state aid sector, solar power plants will no longer sell electricity to the grid at a fixed price as of July 1, according to the Commission for Development and Reform (NRC), the economic planner of China. Instead, these plants will compete in a tendering system designed to allow the network operator to benefit from the lowest rates. according to an opinion (link in Chinese) published this week.
The notification does not entirely remove the tariffs, as an "indicative" price will serve as the upper limit for all negotiated prices depending on the region where the project is located. The target price in Zone 1, which includes most of northern China, is 0.40 yuan ($ 0.06) per kilowatt hour (kWh); for zone 2, which mainly includes western and central China, the tariff is 0.45 yuan per kWh; and for zone 3, which covers the remaining areas such as those in more expensive areas such as Guangdong and the east coast, it is 0.55 yuan per kWh.
The indicative prices are significantly below the reference prices for 2018, which were respectively 20%, 25% and 21% higher for the three zones.
The new bidding system considers that electricity production costs are declining throughout the sector and that solar energy is becoming more and more competitive, Caixin told a researcher at the NDRC's China National Renewable Energy Center. In April, the NDRC announced that several new nuclear projects will benefit from lower than expected tariffs, an evolution also driven by the reduction in electricity costs, partly easing bottlenecks in electricity sales between provinces.
However, if solar energy prices in some regions remain above the coal reference price for that region, solar projects will continue to receive state subsidies, according to the latest NDRC notice.
State Grid Corp. China, which controls about 88 percent of China's electricity grid, has also been urged to make its electricity pricing system more transparent, which experts say will benefit renewable energy generators rooted coal interests. The growing network of high-voltage transmission lines in the network is also helping to reduce the waste of electricity generated by solar energy in the region of China. Western regions rich in renewable energy.
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Contact reporter David Kirton ([email protected])
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