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Policy: Electricity Price Reforms Pilot Project Begin in Chongqing and Guangdong
NEA and NDRC have approved an electricity pricing reform policy in Chongqing Municipality and Guangdong Province. The pricing reforms impact both transmission and distribution lines, and broadly outline rules around a direct trading initiative with private power line use.
Electric power system reforms vary by province. Guangdong is somewhat of a first mover with over 4% of power sold through trades already. We expect the Guangdong pricing guidelines to form a general template for legislation adopted later in other provinces. (BJX CN)
Renewables: Shaanxi Province Year-to-Date Renewable Generation Totals 12 TWh
CEC announced that Shaanxi Province, in the Northwest, generated 12TWh of renewable energy electricity from January to end of November, 2015. The statistics on the renewable energy sources are shown below.
|Source||Utilization Hours||Generation (TWh)||Installed Capacity (GW)|
Wind output rose by 40% over 2014 levels, and PV levels rose by 480%, thanks in part to new installed capacity. Renewable energy generation goals for 2016 and 2017 are set respectively at 16.6 TWh and 24.1 TWh. The government is also interested in biomass projects, with a new plant of undisclosed size set to come online in early 2016. (CEC CN)
Shaanxi Province has over 10GW of exploitable wind power capacity. It is hoped that better grid inter-connection and forecasting technologies will be able to increase wind utilization hours. Moreover, distributed solar is on the rise and will add to the solar base in the region.
Policy: NDRC Drafting Policies to Support Ultra-Low Emission Coal Power Plants
Coal power generation is a fact of life for China — as are high emissions. To curb emissions, the NDRC is implementing a subsidy of 0.01 RMB/kWh for power plants connected before January 1, 2016 which can satisfy ultra-low emission requirements. For plants connected after January 2016, the subsidy is 0.005 RMB/kWh. (NDRC CN)
As mentioned in last week’s Azure news bite, the Chinese government is attempting to lower emissions from coal in the next five-year plan. Ultra-low emission is defined as having an oxygen content of 6% at the reference conditions. Soot, sulfur dioxide, nitrogen oxide emission concentration must be below 10mg/Nm^3,35mg/Nm^3, and 50mg/Nm3.
International Business: 2016 Wind Turbine & Engine Import Tariffs Reduced by 5%
Import tariffs are being reduced for wind turbine and equipment parts, in many cases by 50% or more from previous rates. Import tariffs on wind turbine generator parts will be reduced to 5%, while tariffs for other wind power equipment parts are reduced down to 1%. The table below shows a summary of the current and new tariff structure. (BJX CN)
|No||Tariff Code||Product Name||Current Tax Rate(%)||2016 Temporary Tax Rate(%)|
|457||84129090||Wind power motor parts||8||5|
|604||85023100||Wind turbine drive electric generator||8||5|
|605||85023900||Renewable energy (solar, small hydro, tide, biogas, geothermal energy, biomass/waste heat) electric generators||10||5|
|606||85030030||Wind power equipment components||3||1|
|607||85030090||Part of the alternator that output power above 350MVA driven by renewable fuel boiler or turbine; Renewable energy (solar, small hydro, tide, biogas, geothermal energy, biomass/waste heat) electric generator components||8||5|
|608||85044014||DC stabilized power supply sources that power below 1 kW, with voltage stability coefficient below 0.01% (except machines mentioned in the 8471 tariff code list)||7||3|
The reduction is also part of an APEC agreement from 2012, and is unlikely to have a significant impact on overall wind equipment sourcing flows. Both domestic and international suppliers already have considerable history and experience producing quality products on Chinese territory.
Green Buildings: Curtail Wall Safety Regulation Standards Updated for Hangzhou
The city government of Hangzhou announced safety standards for architectural glass curtain walls. The standards are due in part to a 2011 accident where glass fell and broke the leg of a 19 year-old girl. These Hangzhou standards prohibit glass curtain walls on the second floor or higher for residential, medical, education, and governmental buildings. (China ZZ CN)
As China’s green building market matures, confusing standards sometimes emerge. Banning use of curtain walls for a broad spectrum of buildings will likely prove unpractical, and we expect further policy to emerge. For developers on the ground however, this may create unfortunate delays and new administrative barriers in the local Hangzhou market.