China recently introduced new rules to boost electricity generated from renewable energy. The latest 'Measures for the Administration of Power Grid Enterprises' Full Acquisition of Renewable Energy Power' (administration measures) were adopted on 17 July by the State Electricity Regulatory Commission and came into effect on 1 September 2007.
According to the administration measures six technologies, namely hydropower, wind power, biomass, solar power, ocean energy generation and geothermal power, will enjoy priority scheduling in grid network access. Grid enterprises are obliged to fully purchase electricity from renewable energy, the producers of which are covered by the grid enterprises' respective grid network.
In addition, with the exception of large-scale hydroelectric power, renewable energy power projects are not required to participate in bidding for connection with the grid. Grid enterprises are responsible for construction of the necessary facilities according to approved plans to ensure that renewable energy power will be connected to the power grid.
Grid enterprises will be held liable if they provide no priority scheduling to electricity sourced from renewable energy, or fail to provide full acquisition of renewable energy, which causes economic losses to renewable energy generation enterprises.
Andrew Halper, head of the China business group at Eversheds, comments 'The principle of "full acquisition of renewable energy power" was introduced in the Renewable Energy Law back in 2005. However, due to the lack of implementing rules the principle has not really been implemented.
The introduction of the administration measures is expected to tackle the problems of grid connection for renewable energy generation enterprises and undoubtedly these enterprises, and also equipment manufacturers, are expected to benefit.'
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