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Renewable Energy Subsidies Default Likely to Be Solved This Year

Date:2013-07-08 16:10:00 Author:hnr_admin

News from authoritative sources came that the State Council had urged the Ministry of Finance to quickly establish full amount of renewable energies development funds which was supposed to be invested as subsidy into companies who generated electricity from renewable energies like wind.Meanwhile,the National Development and Reform Commission(NDRC) revealed that the present additional tariff standard of electricity generated from renewable energy could be raise and this proposal had been delivered to the center government.This point had been presently discussed by relevant departments in hopes of finding solutions and it was estimated that problems such as subsidy default would be solved by the end of this year.
Subsidy default was not uncommon
    Many wind power companies told the reporter that at present the renewable energy subsidies default remained a big problem throughout the country.Sometimes the lag was more than 1 year and this had terribly discouraged the investors.Some state-owned wind power company said owing to the subsidy default their uncollectible account caused by wind power projects had reached 900 million yuan.To make the matter worse,the effect of subsidy default was spreading to upstream industries by forming chain debts and vicious cycles between renewable energy companies and equipment manufacturers.
    Officers from China Electricity Council put subsidy default,wind curtailment and grid integration as three major obstacles for renewable energy development,among which the subsidy default seemed to be the biggest problem.
    According to some insiders,the widespread subsidy default could be interpreted from two aspects.For one thing,administrative departments now checked the documents and files more strictly after the fraud cases happened to wind power and photovoltaic projects.For the other,the state financial expenditure was tight and its approval procedures remained time-consuming.Besides,the additional tariff on renewable energy generated electricity was difficult to collect in many places,which had caused huge shortfall in funds.
    Officers from NDRC indicated that more than likely the additional tariff on renewable energy generated electricity could be raised from the current price 0.8cent/KWh.
Application for Demonstration Zones got Underway
    According to China Electricity Council,considering the current price system and the technical and economic condition,the sustainable development of electricity generation from wind,solar and biomass was largely determined by financial subsidies and the rise of electricity price in whole society.
    Not long age six requirements had been put forward by the State Council to boost the development of photovoltaic industry,among which the expanding of renewable energy funds had become an important guarantee for the handing of renewable energy subsidies.It was revealed by NDRC that the possibility to solve subsidy default problem looked good,as the State Council had made helpful instructions and related departments were all working on countermeasures.
    In addition,the application for distributed photovoltaic demonstration had been launched in many provinces.In principle each province could apply for one demonstration zone that could be constructed once approved.Generally these model projects were to be operated by those who built them and the pricing plans could be released soon.

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