China confirms cut to onshore tariff

CHINA: China's National Development and Reform Commission (NDRC), a central government department charged with the overall planning of the country's economic development, has confirmed the reduction of the onshore wind feed-in-tariff (FIT).

Changes to China's FIT have caused a development boom
Changes to China's FIT have caused a development boom

The cuts will affect the four wind regions classified by the first FIT scheme introduced in 2009. Rates will be cut down by $0.02 for type 1, type 2 and type 3 wind regions, reducing electricity prices to CNY 0.49 ($0.078), CNY 0.52 and CNY 0.56 per kilowatt hour.

The CNY 0.61/kWh FIT will be unchanged in the type 4 region, which has low wind resources.

Although the $0.02 cut is better than many had feared, there has been concern about a rush to develop projects in China caused by the impending changes.

The new rates will be applied to all wind projects approved by the National Energy Administration (NEA) after 1 January 2015 and to projects approved before that date but commissioned after 1 January 2016.

The NDRC document also rules that the tariff will be paid by two sources. The part of the wind price that is compatible with the rates for local coal-fired power will be paid by the local provincial grid operator. The remainder will be paid by the national renewable energy development fund.

The NDRC notice said developers and grid operators must submit to the supervision and examination by relevant authorities over how much power they supply to the grid. 

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