China Passes Renewable Energy Law


March 9, 2005 Beijing, China [] It’s official. With the recent passage of China’s new Renewable Energy Law, one of the world’s largest economies has now made one of the largest state-sponsored commitments toward renewable energy. China’s government imposed a national renewable energy requirement that is expected to boost the use of renewable energy capacity up to 10 percent by the year 2020.

Effective next year, the law requires power grid operators to purchase resources from registered renewable energy producers. The law also offers financial incentives, such as a national fund to foster renewable energy development, and discounted lending and tax preferences for renewable energy projects.

China’s new law sets the stage for the widespread development of renewables, particularly for commercial scale renewable generating facilities. Through this legislation, the State officially encourages the construction of renewable energy power facilities. China’s electricity grid is obligated to purchase all the electricity generated by approved renewable energy facilities located in its service area. The grid’s buying price for renewables will be set by the National Development and Reform Commission (NDRC), a regulatory department of the State Council. NDRC will adjust the buying price from time to time as necessary. The cost of purchasing this power will be spread across all customers on the grid.

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