China to let market set clean energy prices

Reuters and staff reporter

China's top economic planning agency said yesterday that it was taking steps to allow clean power prices to be decided by the markets, indicating that the world's second-largest economy would scale back subsidies for renewable energy projects.

China's National Development and Reform Commission said together with China's energy administration it had issued "market-oriented" changes to policies intended to encourage clean energy projects.

The NDRC said China's clean energy capacity of all kinds had reached more than 40 percent of the economy's total energy generation capacity, in part because of the support of a system that guaranteed prices for renewable energy sold to the grid.

China now has almost 887 GW of installed solar power, more than six times the capacity of the United States, according to data from the International Renewable Energy Agency.

"The cost of new energy development has dropped significantly compared to earlier stages," the NDRC said in a statement.

The agency said any new projects completed after June this year would face payments for electricity based on "market-based bidding."

The NDRC said it expected there would be no impact on the price for residential users and farming and that power prices would be "basically the same" for industrial and commercial operations after the change took effect.

The NDRC said it would work with local governments across China on the implementation of the plan. It did not provide details of the pricing formula it would introduce.