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China approves first 21GW of subsidy-free renewables

Solar dominates list as Beijing urges power sector to sign 20-year PPAs with projects

China’s National Development and Reform Commission (NDRC) – the country’s top economic planning agency – on Wednesday approved the first 224 wind and solar projects under its new zero-subsidy policy.

Of a total 20.8GW, the first subsidy-free list encompasses 56 onshore wind farms and 168 solar PV arrays across 16 provinces.

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Solar outweighs wind in the approved projects, with 14.78GW of capacity compared to 4.51GW of turbines.

NDRC also called on China’s power companies to secure 20-year power purchase agreements with the renewable developers to provide long-term guarantees for the projects. Currently, most PPAs in the country are renewed annually.

The list of unsubsidised projects follows a series of changes introduced to the renewable sector to move towards zero-subsidy wind and solar by 2020, a policy target set two years ago.

To advance the plan, the National Energy Administration (NEA) last month unveiled a policy to prioritise approval of subsidy-free wind and solar projects for construction, while the rest could seek construction permits by competing on price in provincial allocations, as Recharge reported.

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Beijing is urging all wind and solar projects from 2019 to participate in local allocation systems in which price competition will be a central element. These include onshore and offshore wind, and utility-scale PV, as well as distributed solar.

The switch aims to reduce the country’s devastating renewable subsidy backlog, lately rising to 110bn yuan ($15.9bn) according to NEA officials.

Along with the unsubsidised wind and PV project list, NDRC also named 26 distributed energy power trading pilots, in which distributed wind and solar projects could seek direct deals with electricity end users.

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