The progress and intensity of renewable energy subsidies have been significantly improved

Why is the subsidy for photovoltaic and biomass power generation negative?

By project type, the total amount of wind power project subsidies issued by the Notice is 4947.89 million yuan, and 2045.82 million yuan has been issued, and 2902.07 million yuan has been issued this time; The total subsidy for photovoltaic power generation projects is 2428.27 million yuan, 2579.93 million yuan has been issued, and this time -151.66 million yuan; Biomass power generation project subsidies totaled 26.56 million yuan, 84.25 million yuan has been issued, and this time -57.69 million yuan.

The reporter noted that the photovoltaic power generation project and biomass power generation project subsidies in the "Notice" were negative in the capital budget, of which photovoltaic was the most prominent. The reporter compared the distribution data of renewable energy subsidies before and found that there were few negative subsidies in the past.

"A negative subsidy means that localities may need to withhold subsidy funds for non-compliant projects." Yuan Jiahai told reporters.

According to the Notice, Power grid enterprises should be in accordance with the Ministry of Ecology and Environment on the Ministry of Finance on the reduction of environmental illegal waste incineration power generation Project renewable energy price additional subsidy funds Notice (Caijian [2020] 199), the Ministry of Finance Notice of the Ministry of Ecology and Environment on the reduction of environmental violations and other agricultural and forestry biomass power generation projects Renewable energy Price Additional subsidy funds (Caijian [2020] No. 591) requirements, in accordance with the provisions of the reduction of subsidy funds.

In addition to the reduction of subsidy funds, another reason for the negative renewable energy subsidies is the reduction of compliance projects.

The reporter found in the "Notice" that "if the project is included in the scope of subsidy verification, the allocation of funds only considers the project that has no objection to the list of economic cooperation and development regulations", that is, based on the list of renewable energy power generation subsidy compliance projects issued by Credit China at the beginning of this year. After preliminary analysis, because there are fewer photovoltaic and biomass power generation full-capacity grid-connected projects in the list of OECD projects, and the subsidy budget issued last time is sufficient, it shows a negative capital budget.

The recovery of overissued subsidies will not affect the issuance of subsidies for compliance projects. According to the "Notice", the priority of subsidies issued is consistent with previous years, that is, the priority of fully allocating national photovoltaic poverty alleviation projects, household photovoltaic 2022 and 2023 corresponding subsidies, competitive photovoltaic projects based on revenue, front-runner projects, and other photovoltaic projects.

In addition, the subsidy funds correspond to the renewable energy installed subsidies and public renewable energy independent systems in the local power grid areas of 14 provinces such as Inner Mongolia, Xinjiang and Gansu, not all renewable energy projects. This also means that the subsidy funds issued this time are only for the local power grid, and the subsidy funds for the State Grid Company and the Southern Power Grid Company will be issued separately.

Industry experts believe that the negative subsidy funds are not a bad thing for the industry, but release a strong signal to strengthen the monitoring of renewable energy subsidy funds. The "Notice" requires that the problems found in the audit and various kinds of verification should be corrected in a timely manner, and the allocation of project subsidy funds should be suspended for the renewable energy price additional subsidy projects suspected of cheating and violations, and the relevant departments should be seriously dealt with after verification and qualitative treatment in accordance with the relevant provisions.

"There have been cases before where subsidies for renewable energy have been clawed back." Yuan Jiahai said. For example, provinces such as Inner Mongolia have issued policies to abolish the subsidy eligibility of non-compliant photovoltaic projects, and recover excess subsidy funds, which also belongs to solving some subsidy problems left behind before.

Strengthen the verification of renewable energy subsidies: more rebates and less subsidies

Subsidies for renewable energy such as wind power and photovoltaic to accelerate their commercialization and maturity are industrial support policies implemented by many countries around the world and proved to be effective.

In recent years, China's renewable energy subsidy policies have been frequent. The reporter found that from November 2011, the Ministry of Finance, the National Development and Reform Commission, and the National Energy Administration jointly issued the Interim Measures for the Management of the collection and Use of Renewable Energy Development Funds, which for the first time clarified the content of renewable energy development funds, and by the end of 2021, there were 15 policy documents related to renewable energy power generation subsidies. It played an important role in the early industry development and industry support. In May 2022, the executive meeting of The State Council said that on the basis of previous support, another 50 billion yuan of renewable energy subsidies would be allocated to central power generation enterprises.

Behind the huge subsidies, the problem of long-term arrears in renewable energy subsidies still exists. On the one hand, the funding source can not meet the demand for subsidies, and on the other hand, the renewable energy development fund has not been fully collected. Coupled with the irrational investment of some enterprises or regions in the early stage of the development of the industry, the gap in subsidy funds is getting larger and larger.

According to the calculation of the wind energy Professional Committee of the China Renewable Energy Society, by the end of 2021, the cumulative arrears of renewable energy power generation subsidies are about 400 billion yuan, and it is expected that the electricity price subsidy gap will peak in 2028.

Industry experts believe that photovoltaic and wind power have entered the era of parity, the total amount of renewable energy subsidies has been "closed", and the time is ripe to solve the problem of subsidy arrears. To this end, many departments in our country have begun to coordinate the solution.

In March 2022, the National Development and Reform Commission, the National Energy Administration, and the Ministry of Finance jointly issued the Notice on carrying out Self-examination of Renewable energy power generation Subsidies, requiring verification of renewable energy power generation subsidies to further find out the subsidy base.

In August 2022, the National Development and Reform Commission, the Ministry of Finance and the State-owned Assets Supervision and Administration Commission of the State Council required that the State Grid and the Southern Power Grid would respectively establish Beijing and Guangzhou Renewable Energy Development Settlement Services Co., Ltd. to solve the subsidy funding gap through special financing in accordance with market-oriented principles on the basis of financial allocations.

Subsidy verification is the key to solve the problem of renewable energy subsidies. At the same time of making it clear that the subsidy funds in arrears are reissued, the subsidy funds for non-compliant projects should also be recovered.

The National Energy Administration also made it clear in the key tasks of this year's energy work announced at the end of 2022 that it should "complete the verification of renewable energy subsidies." Since last year, Taiji Industrial (6.500, -0.08, -1.22%), Jiangnan Chemical (4.300, 0.00, 0.00%) and other listed companies have announced that they were required to return subsidy funds due to the verification of renewable energy subsidies.

In sharp contrast to the return of high subsidies, the progress and intensity of subsidies for compliance projects have been significantly improved.

The person in charge of China Energy Saving Solar Energy (5.440, 0.05, 0.93%) Technology Co., Ltd. disclosed to reporters that the National Development and Reform Commission, the National Energy Administration and the Ministry of Finance announced the first batch of verification catalog lists at the end of 2022, and the company received 3.626 billion yuan of renewable energy subsidy funds for the whole year of 2022. Of the total, the state subsidy is about 3.501 billion yuan. This amount is far ahead of the total subsidy for two years.

From the feedback within the industry, at the end of 2022, many photovoltaic investment companies "surprise" received a higher amount of subsidies, and throughout the year, the subsidy funds received were significantly higher than the previous year.

Although the national policy in the era of parity will no longer subsidize new renewable energy projects, due to the huge base of stock projects in the era of electricity price subsidies and the project life cycle will still exist for more than ten years, the state financial subsidies will continue for a longer time.

"The issuance of local subsidy funds for national renewable energy electricity prices will help to solve the funding gap for renewable energy power generation subsidies, help to improve the financial situation of new energy development enterprises, improve their reinvestment capacity, and ensure domestic power supply." Zhang Jianhong, executive director of the Environmental Technical Economy Branch of the China Society of Technical Economics, said that it is expected that more subsidies will be issued in the future, which will help the sustainable development of the new energy power generation industry.