Should the state "step on the brakes" of the waste power generation industry?

Operating income composition of domestic waste incineration power generation project

For domestic waste incineration power generation projects, garbage treatment service fee income and online power generation income are two important factors affecting the income. At the same time, the Ministry of Finance and the State Administration of Taxation "Preferential Policies on value-added Tax on Comprehensive Utilization products of some resources" (Finance and Taxation (2015) No. 78) are implemented. The comprehensive utilization of waste power generation resources implements the policy of VAT collection and refund, and labor services are taxed in accordance with the policy of 100% tax refund and 70% tax refund.

In terms of electricity price subsidies, with reference to the provisions of the "Notice of the National Development and Reform Commission on Improving the Price policy of waste incineration power Generation" (Price [2012]801) document, the amount of domestic waste processed into the factory is converted into online electricity for settlement, and the amount of domestic waste converted into online electricity is tentatively set at 280 KWH per ton. And implement the national unified benchmark price of waste power generation 0.65 yuan per KWH (including tax, the same below); The rest of the on-grid electricity shall be subject to the on-grid electricity price of similar local coal-fired generating units.

Factors affecting the withdrawal of central subsidies

In the past two years, a lot of policy documents have been issued on the decline of domestic waste incineration power generation to a smooth exit. The following are mainly analyzed from the two perspectives of enjoying the central subsidy time and sharing the central subsidy part.

According to the Supplementary Notice on matters related to "Several Opinions on Promoting the Healthy Development of Non-water Renewable Energy Power Generation" jointly issued by the Ministry of Finance, the National Development and Reform Commission and the Energy Bureau (Caijian [2020] 426) guidance document content "Annual utilization hours of about 6560 hours" and "Supplementary Notice" "full life cycle [annual utilization hours] 82,500 hours to enjoy The maximum period of national subsidy and national subsidy is 15 years ".

In fact, as early as 2006, the National Development and Reform Commission on the issuance of "Renewable Energy power generation Price and cost allocation Management Trial Measures" (development and reform price [2006] No. 7) in the "power generation project from the date of production, 15 years to enjoy subsidized electricity prices; After 15 years of operation, the subsidized electricity price will be abolished." The policy already provides for a 15-year national subsidy period, but 82500 utilization hours is a new requirement, equivalent to adding a cap to the project life cycle on the basis of the 15-year national subsidy period.

The "2021 biomass power generation project construction work Plan" (Development and Reform Energy [2021] No. 1190) requires the central subsidy part of non-competitive allocation projects to be shared by the central government, and the central subsidy part of competitive allocation projects to be competitive online.

In view of the current on-grid electricity price of domestic waste incineration power generation projects in various regions of the country, it is described as follows: >>

(1) The on-grid electricity price of the domestic waste incineration power generation project is composed of three parts: the benchmark price of coal-fired power generation, the provincial price subsidy and the central price subsidy. Due to the different benchmark price of coal-fired power generation in each region, the central price subsidy of each region is very different.

(2) The geographical distribution of coal resources in China is extremely unbalanced. China's coal resources are more in the north and less in the south, more in the west and less in the east, and the distribution of coal resources is very inconsistent with the distribution of consumption areas. In areas rich in coal resources, there are many coal-burning power generation projects, which leads to the low benchmark price of local coal-burning power generation. However, the benchmark price of coal-fired power generation is higher in economically developed regions with scarce coal resources. For example, the benchmark price of coal-fired power generation in Guangdong is the highest at 0.4530 yuan/KWH, while that in Ningxia is the lowest at 0.2595 yuan/KWH. Eastern Mongolia and western Mongolia, both in the Inner Mongolia Autonomous Region, are also different, and their benchmark electricity prices for coal-fired power generation are 0.3035 yuan/KWH and 0.2829 yuan/KWH, respectively.

(3) Due to the difference in the benchmark price of coal-fired power generation in each region, the central price subsidy for local solid waste incineration projects varies greatly. In the case of the other boundary lines of the project, for domestic waste incineration power generation projects in areas where the central electricity price subsidy accounts for 44.69% of the on-grid electricity price, the withdrawal of the central electricity price subsidy means that the domestic waste treatment service fee will increase by 81.34 yuan per ton.

Take a solid waste incineration project in Heilongjiang Province as an example

A solid waste incineration project in Heilongjiang Province invested 565.23 million yuan, designed to treat 1000 tons/day, equipped with two 500-ton incinerators and one 20MW turbo-generator unit; At the same time, supporting construction of flue gas purification system, waste water treatment system, fly ash treatment system and other supporting projects.

According to the "2021 biomass power generation project construction Work Plan" (Energy [2021] No. 1190) policy, if the non-competitive configuration project, according to the domestic waste treatment service fee :60 yuan/ton, annual operation days :333 days/year, franchise period: 30 years (construction period: 2 years), on-grid electricity price: The boundary conditions of coal benchmark electricity price 0.3740 yuan/KWH, provincial electricity price subsidy 0.1 yuan/KWH, central electricity price subsidy 0.1760 yuan/KWH (82500 hours of the whole life cycle can enjoy the central electricity price subsidy) are as follows:

According to the "2021 biomass power generation project construction Work Plan" (energy [2021] No. 1190) policy, if it is a competitive configuration project, according to the domestic waste treatment service fee :60 yuan/ton, annual operating days :333 days/year, franchise period: 30 years (construction period: 2 years), on-grid electricity price: The boundary conditions of coal benchmark electricity price 0.3740 yuan/KWH, provincial electricity price subsidy 0.1 yuan/KWH, central electricity price subsidy 0.1760 yuan/KWH (need to participate in bidding online part) are as follows:

"12th Five-Year", "13th Five-Year" ten years to encourage the development of solid waste incineration power generation projects and do not specify the specific scope and time of decline, the same scale and similar boundary conditions, many projects previously estimated than a solid waste incineration project in Heilongjiang Province non-competitive allocation class is more optimistic; Similarly, according to the "Work Plan for the construction of biomass power generation Projects in 2021" (Energy [2021] No. 1190), the economic difference between non-competitive configuration projects and competitive configuration projects is also very large. After the end of 2021, the competitive configuration projects that achieve the completion of all units and connect to the grid need to further adopt the multiple application of biomass energy. Reduce power generation costs and other means to improve the economy of the project.

conclusion

Since 2020, the state has started to put the brakes on the domestic waste incineration power generation industry. Compared with the Notice of the National Development and Reform Commission on Issuing the "Trial Measures for the Management of Renewable Energy Power Generation Price and Cost Allocation" (Development and Reform Price [2006] No. 7), The two documents of the National Development and Reform Commission, the Finance Bureau and the National Energy Administration on issuing the "Implementation Plan for Improving the Construction and Operation of biomass Power Generation Projects" (Development and Reform Energy (2020) No. 1421) and the "Work Plan for the construction of biomass power generation Projects in 2021" (Development and Reform Energy [2021] No. 1190) clearly stipulate that the central subsidies will be withdrawn year by year The time and plan mainly involve central subsidy funds, project storage, and the proportion of central subsidy shared by the central government.

In addition to the central subsidy time and central subsidies and other factors, the economy of domestic waste incineration project is also affected by the waste treatment service fee payment cycle, the benchmark price payment cycle of coal-fired power generation, the provincial price subsidy payment cycle, the central price subsidy payment cycle, etc. In particular, the central electricity price subsidy of non-competitive allocation projects needs to continue to queue and the bidding cycle of competitive allocation projects needs to be further clarified.