May 27, 2019 (China Knowledge) - China will be ending subsidies for new onshore wind power projects starting from 2021 with renewable projects expected to be able to compete with traditional coal and gas-fired electricity by then.
Traditionally, renewable energy projects had relied on subsidies and other preferential policies to encourage more developers to build plants with China paying a relatively high rate for electricity produced at such renewable projects. However, in recent years, the government has shifted to focus for the renewable energy towards grid-price parity with traditional sources such as coal.
According to the National Development and Reform Commission (NDRC), tariffs paid to onshore wind projects will be cut to as low as RM 0.29 per kilowatt-hour in 2020 with grid price parity being applied to all projects starting 2021.
China has been scaling back subsidies for both wind and solar projects after a rapid fall in equipment and construction costs with the country’s energy regulator announcing last year that it would make an extra push to provide technological and policy support to the sector to ensure that it can operate subsidy-free.
Early this year, China had also launched a series of subsidy-free wind and solar projects after noting that solar construction costs had fallen by 45% from 2012 to 2017 with wind project costs also falling by 20% over the same period.
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