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China Photovoltaic Industry Association: Key Interpretation of the 2019 Photovoltaic Policy Draft for Comments
Release time:
2019-04-18
On April 12, 2019, the National Energy Administration issued the "Notice on the Management of Wind Power and Photovoltaic Power Generation Construction in 2019 (Draft for Comments)". After receiving the document, the China Photovoltaic Industry Association immediately consulted relevant experts for interpretation on related issues.
On April 12, 2019, the National Energy Administration issued the "Notice on the Management of Wind Power and Photovoltaic Power Generation Construction in 2019 (Draft for Comments)". After receiving the document, the China Photovoltaic Industry Association immediately consulted relevant experts for interpretation on related issues, with the key points as follows:
I. Adhering to the overall approach of seeking progress while maintaining stability, it is clarified that photovoltaic projects will be divided into those requiring national subsidies and those not requiring national subsidies.
Projects that do not require subsidies will be implemented by each province according to the policies for low-cost, grid-parity projects. Projects that require subsidies are divided into five categories:
1. Poverty alleviation projects;
2. Household photovoltaic systems;
3. General photovoltaic power stations (ground-mounted power stations);
4. Commercial and industrial distributed photovoltaic systems;
5. Special projects or demonstration projects organized and implemented by the state
II. Support the development of household photovoltaic systems, and manage household photovoltaic systems separately
750 million yuan is allocated separately for household photovoltaic system subsidies. The support scale in 2019 is about 3.5GW. Power grid companies will announce the installed capacity of the previous month on the 10th of each month. When the announced installed capacity of the previous month exceeds the total scale limit, the last day of the month will be the deadline for grid connection of household photovoltaic systems that can receive national subsidies this year (i.e., household photovoltaic systems have a one-month buffer period).
It is clarified that household photovoltaic systems that were connected to the grid after May 31 last year and were not included in the national subsidy scale can apply for the 2019 quota. The subsidy starting point will be calculated based on the time node when each province approves the application and obtains subsidy qualifications. Support will be provided based on the 2019 subsidy standards for household photovoltaic systems.
III. Fully implement market-competitive allocation
Except for poverty alleviation, household systems, and previously approved special projects, distributed and ground-mounted power stations will all use bidding to obtain subsidy indicators. Provincial energy authorities will review and summarize the applications according to the requirements and submit the reported subsidy projects, expected commissioning time, grid-connected electricity price, etc., to the National Energy Administration. The National Energy Administration will select the projects included in the subsidy scope based on the revised reported grid-connected electricity price quotations, from low to high. Revision rules are:
(1) General photovoltaic power stations and full-scale grid-connected commercial and industrial distributed photovoltaic power generation projects: The revised electricity price in Class II resource zones = reported electricity price - 0.05 yuan/kWh; The revised electricity price in Class III resource zones = reported electricity price - 0.15 yuan/kWh.
(2) Self-generation and self-use, surplus power grid-connected commercial and industrial distributed photovoltaic power generation projects: The revised electricity price = reported electricity price - coal-fired benchmark electricity price in the province + 0.3 yuan/kWh. For projects in areas where the coal-fired benchmark electricity price is less than 0.3 yuan/kWh, the reported electricity price will not be revised.
(3) The reported electricity price will be in units of 0.1 cent/kWh.
Projects with the same revised grid-connected electricity price will be ranked according to the installed capacity of each project, from small to large, until the total subsidy amount of the selected projects reaches the national quota for the total amount of subsidies for new projects in that year. The project list and subsidy standards for each project will then be publicly announced.
For example:
Jiangsu (III), Company A develops a ground-mounted power station, with a reported electricity price of 0.45 yuan/degree,
A revised electricity price = 0.45 - 0.15 = 0.3 yuan/degree;
Jiangsu (III), Company B's self-generation and self-use, surplus power grid-connected commercial and industrial power station, with a reported electricity price of 0.5 yuan/degree,
B revised electricity price = 0.5 - 0.391 + 0.3 = 0.409 yuan/degree;
Jilin (II), Company C's full-scale grid-connected commercial and industrial power station, with a reported electricity price of 0.45 yuan/degree,
C revised electricity price = 0.45 - 0.05 = 0.4 yuan/degree;
Jilin (II), Company D's self-generation and self-use, surplus power grid-connected commercial and industrial power station, with a reported electricity price of 0.5 yuan/degree,
D revised electricity price = 0.5 - 0.3731 + 0.3 = 0.4269 yuan/degree.
The bidding results are ranked as follows: A, C, B, D. That is, ground-mounted power stations in Class III resource zones are better than those in Class II resource zones. Photovoltaic power stations are also suitable for development in Class III areas with slightly poorer light resources.
IV. Bidding is organized and reported by each province, but the national ranking is unified. Subsidy applications and bidding are generally organized once a year.
The project bidding is calculated based on the commissioning quarter, i.e., the grid connection node. If, for various reasons, the project is not completed, the grid-connected electricity price subsidy will be reduced by 0.01 yuan/kWh for each overdue quarter. If it is not completed after two quarters, the subsidy qualification will be cancelled.
V. Connection of new and old projects
For projects that have started construction but have not yet been connected to the grid, and projects that have been included in the scale but have not started construction, if they cannot be fully connected to the grid by the end of 2019 and the end of 2020 respectively, they will no longer be included in the national subsidy scope. Leading bases, demonstration bases, and special projects that are separately bid will not participate in subsidy application bidding ranking, and the grid-connected electricity price and corresponding subsidy standards determined by the bidding of each project will be implemented; for photovoltaic projects supporting national cross-provincial and cross-regional power transmission channels that have been competitively bid and project owners and grid-connected electricity prices have been clearly defined according to relevant regulations before the issuance of this document, the original policies will continue to be implemented; for power transmission channel construction that has been approved, and the supporting photovoltaic installed capacity has been clarified but the project owner and grid-connected electricity price have not been clarified before the issuance of this document, the local authorities will organize separate bidding to determine the project owner and grid-connected electricity price according to the relevant requirements (to be formulated separately) of the National Energy Administration.
VI. Guarantee of hours calculation method
When calculating the cumulative total subsidy amount nationwide, the annual subsidy amount for each project is "electricity subsidy intensity × installed capacity × annual utilization hours", where the annual utilization hours are calculated according to the stipulated minimum guaranteed purchase annual utilization hours. If the minimum guaranteed purchase annual utilization hours are not stipulated, they are calculated based on 1300 basic hours for Class II regions and 1100 basic hours for Class III regions.
In this draft for comments, it is not indicated whether the previously developed ground-mounted power station projects in various places under the "first-come, first-served" system will be included in the competitive allocation mechanism. This is a major change compared to the previous version of this draft for comments. Considering that the national energy authority has repeatedly mentioned in relevant documents that "it is strictly prohibited to expand the scale of photovoltaic power generation in disguised forms such as the first-come, first-served system".
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