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Who in China Gets Subsidies? The Management of Photovoltaic Power Generation Construction in 2019 Will Face Great Changes

This year, major institutional innovations will be made in the management of photovoltaic power generation in China.
On the afternoon of February 18, the New Energy Department of the National Energy Administration convened a symposium for relevant companies to solicit corporate opinions on the management of photovoltaic power generation in 2019.
"The Ministry of Finance determines the scale of subsidies, the upper limit of subsidies set by the NDRC, the competition rules set by the Energy Bureau, the intensity of enterprises 'subsidies, and the scale of market construction. Industry experts have summed up the key points of the draft consultation.

In addition to the business representative seminar on the afternoon of February 18, the Department of New Energy of the Department of Energy will also organize a symposium for experts and associations on February 19. This also means that the draft opinion is only a discussion draft, and more details will be implemented in the future. There is still room for adjustment.

Decrease subsidies, market expansion

At the end of 2018, China's photovoltaic power generation ranks first in the world, and photovoltaic power generation has changed from a high-speed growth stage to a high-quality development stage.
In order to further improve the management of photovoltaic power generation construction, the National Energy Administration stated at a press conference held earlier that according to the actual development of the industry, photovoltaic development in 2019 will be divided into photovoltaic power projects that do not require state subsidies and photovoltaic power projects that require state subsidies..
For photovoltaic power generation projects that do not require state subsidies, local governments shall organize the construction of such projects on the premise that they meet the management requirements of planning, monitoring and evaluation of the market environment, and implement the conditions such as access to the network. Specifically in accordance with the provisions of the "Circular on Actively Promoting the Work of Unsubsidized Affordable Internet Access for Wind Power and Photovoltaics".
For photovoltaic power generation projects that require state subsidies, except for projects that are specially supported by state policies, in principle, construction projects and subsidies should be determined by market-oriented competition.
The discussion paper, which was of great interest, divided the projects that needed subsidies into five categories: poverty reduction projects; Household photovoltaic; Ordinary photovoltaic power stations(ground power stations); Industrial and commercial distributed photovoltaic and leading players, ultra-high pressure channel supporting and other special projects.
In addition to poverty alleviation, household use and approved special projects, the discussion paper pointed out that distributed and terrestrial power stations all use competitive methods to obtain subsidy targets. The change in management thinking is also reflected in the fact that the scale of the project is no longer allocated to various places in a "netting" manner, and the development of better resources is given priority.
"The significance of the upper limit of the price set by the NDRC is to set the price of electricity for non-competitive projects such as household photovoltaic and poverty alleviation. The Energy Bureau formulates the rules for bidding, and enterprises declare the price of electricity according to their own conditions, which is equivalent to the strength of subsidies to be determined by the enterprises themselves. So the size of the market is determined by the market, which means that the identity of the Energy Agency has also changed dramatically, from the management of resource distribution to auction houses. "Pengpeng, Secretary General of the New Energy Power Investment Alliance, said.
According to market rumors, the scale of photovoltaic new subsidies in 2019 is RMB 3 billion, so the higher the power subsidy, the smaller the market size. The willingness on the part of companies is that the size of the market is willing to transfer the intensity of subsidies before the intensity of subsidies, in exchange for greater market size.
"The shift in role is the general trend, because according to the current situation in the market, if there is no alternative source of funding for renewable energy subsidies, and at the same time it is hoped that there will be a larger market size to support the new market, and then drive the subsequent manufacturing industry., Therefore, there is a need to reduce the intensity of subsidies and come up with new project allocation methods. The new energy power investment alliance believes this will make it more difficult for energy bureaus at all levels to manage projects.

How to bid?

Specifically, according to the division of the resource area where the project is located, the price of the bid will be rated as the decrease in the price of the bid price(with the smallest unit as the minimum unit) compared to the maximum bid price of each resource area, and the large reduction will be ranked first to determine the items included in the subsidy scope. Until the total amount of subsidy for the selected project reaches the total amount of subsidy for the current new project set by the State.
The core of the existing bidding rules is to control the total amount of subsidies through bidding so that it can support as many projects as possible.
In terms of refinement, provinces will calculate the total amount of subsidies for annual projects based on the expected annual power generation hours and installed capacity after ranking according to the level of the subsidy price compared to the level of the competitive price. The competent national department then puts the projects summarized by each province into the summary table, and ranks the price of the combined tariff declaration as compared with the price of the bid upper limit, until the total amount of subsidies for the selected projects reaches the total amount of subsidies for the new project in the year determined by the state.
After "2018," 5.31 "After the network, projects that do not require subsidies have the most advantages. For these companies, subsequent subsidies are additional benefits. Mr Pengpeng said: "Further discussion is needed on how to participate in completed projects." "
It should be noted that the discussion on modalities and methods of bidding should also take into account relevant supporting documents, such as the electricity price policy document, the document on the clear allocation of subsidies, and the document on the market environment monitoring mechanism. The specific implementation of the bidding involves some of the provisions in the above documents that are questionable.
"If the national policy can be released by the beginning of March, considering that the provinces still need to conduct project statistics for a certain period of time, it is already a more optimistic estimate for the development companies in the second quarter. If we want to achieve the network by the end of the year, There are only two quarters of the construction cycle, which is more stressful for state-owned enterprises. "Pengpeng said.
According to the discussion paper, when reporting, each project is required to report a clear construction period, that is, the production season. Projects that enter the scope of state subsidies should be completed and connected before the end of the expected production quarter of the declaration. If they are not completed by the end of the deadline, the price of electricity and subsidies should be reduced by the same extent as the National tariff policy.
If it is not completed within two quarters after the filing quarter, it is considered as an automatic waiver, disqualifying the project subsidy, and affecting the market environment monitoring and evaluation in the area, which ultimately affects the owner's next year's project declaration.
Regarding the new market in 2019, Anxin New pointed out that in the first quarter of this year, everyone has a high degree of enthusiasm for photovoltaic. This year's overseas business has grown rapidly. First-and second-tier companies have already signed up for orders in the first half of the year, and some companies are also signing orders for the third and fourth quarters. These orders also come mainly from overseas markets. After "May 31", overseas markets reflected the demand for parity.
"The efforts in the Chinese industrial chain have brought many foreign markets to a state of parity. At present, the amount in Europe has grown rapidly. From this perspective, many enterprises will have a good performance in this round of cycle, industrial chain prices have also recovered. "Anxin new chief Dengkangyong said.

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