"14th Five-Year Plan" biomass power generation local subsidies "play a leading role"



Since 2021, projects newly included in the scope of subsidies, including projects that have been connected to the grid in 2020 but have not been included in the scale of subsidies that year, and projects that have been newly connected to the grid since 2021 and have been included in the scale of subsidies, the subsidy funds are jointly borne by the central and local governments. The state will increase the proportion of biomass electricity price subsidies shared by local governments year by year until the central finance is completely withdrawn.

The National Development and Reform Commission, the Ministry of Finance, and the National Energy Administration recently jointly issued the "Implementation Plan for improving the construction and operation of biomass power generation projects" (referred to as the "Plan"), which is clear that the overall idea of "receiving fixed compensation, new and old sections, orderly construction, and stable development" is still in use this year. In other words, "revenue determines expenditure" will be the first principle to determine the scale of annual subsidies and project construction scale, no matter how to allocate project resources, this red line can not be crossed.

The "Plan" makes it clear that the subsidy quota calculation rules are to calculate and add up the subsidy amount required for projects included in the scope of subsidies until the total subsidy amount required for included subsidy projects reaches 1.5 billion yuan this year. The 2020 grid-connected projects that failed to be included in the scale of central subsidies in 2020 were carried forward to the following year and included in order. In addition, the "plan" also makes it clear that since January 1, 2021, the biomass power generation projects that have been approved and not started in the planning and newly approved are all configured through competition.

Subsidies will be shared between the central and local governments

In the view of the industry, in order to maintain the continuous stability of industrial policy and avoid the impact of the New Deal on projects that have been put into operation and under construction after January 20, 2020 (the date of the release of the "Financial construction [2020] No. 4" and "financial construction [2020] No. 5"), the three ministries and commissions took January 1, 2021 as the demarcating point of the new and old policies. A period of decision making has been allowed for projects that have been approved but not started.

"The implementation plan not only takes into account how the current projects under construction can obtain electricity price subsidies, but also points out the direction for the development of the industry during the" 14th Five-Year Plan "period, giving the industry clear expectations." Industry senior told reporters that in order to avoid industrial development "sudden brakes" and "a one-size-fits-all", the "plan" takes a gradual and gradual approach to give biomass power generation enterprises more policy adjustment and adaptation period.

According to the Guiding Opinions on Building a Modern Environmental Governance System and the Reform Plan for the division of Central and local financial Powers and expenditure Responsibilities in the Field of Ecological Environment, pollution prevention and control of various types of urban and rural waste is a local power. The utilization of biomass energy mainly has environmental protection attributes, and the development of biomass energy is mainly to treat urban and rural organic waste harmlessly, reduce and recycle, and protect the local ecological environment. The "Plan" further defines the main responsibility for the development of biomass energy, since 2021, newly included in the scope of subsidies, including 2020 has been connected to the grid but not included in the scale of subsidies in the year of the project and 2021 new grid into the scale of subsidies, subsidy funds are jointly borne by the central and local governments. At the same time, taking into account the level of economic development in different regions, a reasonable and differentiated share ratio is determined by region, and the specific sharing method will be clarified in the 2021 construction plan.

It is reported that the state will increase the proportion of biomass electricity price subsidies shared by local governments year by year until the central finance is completely withdrawn. This means that the local role will be mobilized and play, increase the source of subsidy funds, so that more projects can be included in the scope of policy support, in addition, although the central financial subsidies are declining year by year, but in exchange for the local government's enthusiasm and main responsibility for the development of biomass energy, the industrial scale will continue to expand, the development model will be more mature and perfect.

The above senior people believe that during the "14th Five-Year Plan" period, with the acceleration of ecological civilization construction and the gradual landing of various measures in the implementation plan, provinces with greater pressure on the disposal of urban and rural organic waste may take the lead in introducing policies to support the development of the biomass energy industry. In particular, with the gradual expansion of the garbage classification implementation area and the continuous improvement of the garbage classification policy, the urban solid waste charging system will be gradually established across the country, which will lay a certain financial foundation for local governments to undertake the main responsibility of organic solid waste disposal.

Force the industry to innovate and develop

"Compared with photovoltaic and wind power, biomass energy is more special, and the use of biomass gas, waste power generation, straw power generation, biomass heating and other products is diversified, making the subsidy program difficult to follow the strategy of wind power and photovoltaic." A person familiar with the matter who did not want to be named said that the state hopes that the subsidy funds can play a leverage effect to leverage the healthy and orderly development of the biomass energy industry with small funds. "Therefore, in the process of compiling the Plan, the relevant departments held several symposiums at the four levels of local governments, enterprises, associations and the media to fully solicit opinions from all parties."

The interviewed industry insiders generally believe that with the biomass power generation bidding and electricity price subsidy sharing ratio to the local tilt year by year, the original industrial development model with power generation as the main profit point will change, and the diversified profit model of the future project will support the healthy, steady and high-quality development of the biomass power generation industry.

In the view of relevant industry organizations, because it is currently in the transition period of new and old policies, there may be a certain impact on the biomass power generation industry in the short term, but in the long run, the introduction of the program will help promote the technological progress of the biomass energy industry, force the innovation and development of the industry, and improve the competitiveness of the industry and the overall profit level. In general, the introduction of the Program will be more conducive to the healthy and sustainable development of the industry.

We will strengthen investment monitoring and early warning

It is particularly noteworthy that in order to promote the sustainable and healthy development of the biomass power generation industry, the "Plan" proposes to establish a monitoring and early warning system, comprehensively evaluate the development of the industry, and guide enterprises to scientific and orderly construction and rational investment.

Monitoring and early warning system, on the one hand, the development scale of agricultural and forestry biomass power generation industry for annual early warning; On the other hand, the investment and construction of biomass power generation projects that need subsidies are monitored, and the project grid-connected information is released monthly.

The annual warning of industry development is based on the total amount of agricultural and forestry biomass resources in each province, resource distribution, utilization, project layout and other conditions, scientific calculation of reasonable development scale, and issued monitoring early warning according to the comparison between the construction scale of power generation projects in each province and the annual reasonable scale. For example, the scale of installed capacity built and approved under construction or to be built is close to a reasonable scale, and yellow warning will be given; The installed capacity that has been built and the approved installed capacity that is under construction or to be built reaches or exceeds a reasonable scale shall be given a red warning. Yellow warning areas whose development scale is close to a reasonable scale should grasp the rhythm of development and construction; In red alert areas that reach or exceed a reasonable scale, the scale of construction should be strictly controlled and managed.

Subsidized project investment and construction monthly monitoring, for the need to subsidize the biomass power generation project investment and construction and the use of central subsidy funds to monitor, monthly release of project grid-connected information, new project subsidy quota reached the total amount of 1.5 billion yuan of central subsidy funds this year, the local no longer new approval of the central subsidy projects.