PV policy implementation: State Grid responds to South China network disdain

On July 31, the Ministry of Finance website issued the “Notice on Relevant Issues Concerning the Power Subsidy Policy for Distributed Photovoltaic Power Generation” (hereinafter referred to as the “Notice”), and clarified the policy implementation measures for distributed photovoltaic power generation projects according to electricity subsidies.

Uniform electricity subsidy

Encourage large-scale demonstration zones

According to the Notice, the state subsidizes the amount of electricity allocated to distributed photovoltaic power generation projects, and the subsidy funds are transferred to the distributed photovoltaic power generation project units through the grid enterprises. A distributed photovoltaic power generation project applying for subsidy must meet the following conditions: complete the filing in accordance with the procedures. The specific filing method shall be separately formulated by the National Energy Administration; the project shall be completed and put into production, comply with the relevant conditions of the grid connection, and complete the grid access work such as grid connection acceptance.

It should be noted that the projects that enjoy the Golden Sun Demonstration Project subsidy fund and the solar photovoltaic building application financial subsidy fund are not covered by the distributed photovoltaic power generation subsidy. The photovoltaic power generation on-grid price determined by the competent price department of the photovoltaic power station is not included in the scope of distributed photovoltaic power generation subsidies.

The "Notice" stipulates that eligible projects can be submitted to the local grid enterprises and reported to the financial, price and energy authorities at the same level for review. The projects within the scope of the State Grid and China Southern Power Grid are summarized by the power provinces of the provinces (autonomous regions and municipalities) and reported to the State Grid Corporation and China Southern Power Grid Corporation after approval by the provincial finance, price and energy authorities. After reviewing and summarizing the State Grid Corporation and China Southern Power Grid Corporation, they will report to the Ministry of Finance, the National Development and Reform Commission, and the National Energy Administration. The Ministry of Finance, the National Development and Reform Commission, and the National Energy Administration will review the submitted project organization and include the eligible items in the subsidy catalogue for announcement.

The "Notice" did not announce the subsidy standard. It only indicated that the subsidy standard was comprehensively considered to determine the distributed PV on-grid price, power generation cost and sales price, and adjusted in due course. The specific subsidy standard will be issued separately after the National Development and Reform Commission has issued the distributed PV on-grid price.

According to the reporter, although the National Development and Reform Commission has not released specific figures, it is known from the industry that 0.42 yuan / kWh should be a foregone conclusion. This is also in line with the spirit of the previous National Energy Administration's Symposium on Promoting the Healthy Development of the Photovoltaic Industry: the financial subsidy requirement for the demonstration area project is not more than 0.45 yuan / kWh.

The "Notice" stated that the power grid enterprises metered and measured the power generation, on-grid power and spontaneous self-use of the projects included in the subsidized catalogue of distributed photovoltaic power generation projects according to the user's meter reading cycle, as the basis for calculating the subsidies.

Some insiders questioned whether it is appropriate to implement uniform subsidy standards for projects in different regions and different user types.

In this regard, Meng Xianyu, vice chairman of the China Renewable Energy Society, told reporters that “if it is divided into regions, it is more difficult to set up a variety of electricity prices. More importantly, because of limited market capacity, subsidized funds are not abundant. The current policy orientation is to encourage large-scale demonstration zones."

According to the "Several Opinions of the State Council on Promoting the Healthy Development of the Photovoltaic Industry", the State encourages all types of power users to construct distributed photovoltaic power generation systems in the manner of "spontaneous use, surplus Internet access, and power grid regulation". Priority is given to supporting the construction of large-scale distributed photovoltaic power generation systems in industrial and commercial enterprises and industrial parks with high electricity prices.

"According to the regulations, spontaneous self-use and on-grid power enjoy a unified subsidy. However, spontaneous self-use is based on the electricity price of 0.42 yuan / kWh, while the on-grid electricity is based on the desulfurization coal-fired benchmark price plus 0.42 yuan / kWh It’s still cost-effective for self-use.” Meng Xianyu said.

In June of this year, the National Energy Administration required the provincial energy bureaus to summarize the implementation plan of the distributed photovoltaic power generation large-scale application demonstration zone to the National Energy Administration before July 10. The approved demonstration zone needs to start the project construction before the end of July. However, the list of demonstration areas has not yet been announced.

Fund supervision should not be relaxed

Looking forward to the follow-up actions of the competent authorities

The Notice also provides for the payment of funds. According to the renewable energy price increase income and the estimated power generation of distributed photovoltaic power generation projects, the central government will allocate subsidy funds to the provincial financial departments of the State Grid Corporation, China Southern Power Grid Corporation and local independent power grid enterprises on a quarterly basis. According to the power generation capacity of the project and the subsidy standards determined by the state, the grid enterprises pay the subsidy funds in time according to the electricity bill settlement cycle. The specific payment method was formulated by State Grid Corporation, China Southern Power Grid Corporation, and local independent grid enterprises.

In addition, the subsidy fund disbursement procedures for renewable energy generation such as photovoltaic power plants, large-scale wind power generation, geothermal energy, ocean energy, and biomass energy have been simplified. In the grid-connected power generation project and the network connection project within the national grid and the southern power grid, the subsidy funds are no longer allocated through the provincial finance department, and the central government directly allocates funds to the State Grid Corporation and China Southern Power Grid Corporation. The central government has allocated additional funds for renewable energy tariffs, and the local financial departments should allocate them to the grid enterprises at the end of August.

“This is a welcome change. However, the supervision of funds has yet to be resolved. The next step is to look at the two major power grids. The State Grid previously issued the “Opinions on Doing a Good Job in Distributed Power Grid-Connected Services”, but the South Network has no action yet. Let's take a look at the specific measures issued by the National Energy Administration and the National Development and Reform Commission to implement the spirit of the State Council on promoting the healthy development of the photovoltaic industry." Some experts said in an interview.

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