China Sets Focus Areas For Energy Transition

• China's NEA and NDRC have released a policy document that establishes the priority areas for the country to focus on for its energy transition
• It plans to use available space and resources in desert regions including Gobi desert to set up large scale solar and wind energy projects
• BIPV applications in buildings as well as decentralized development of wind and solar projects in rural regions will be promoted
• It will encourage new energy power generation entities to sign long-term power purchase and sales agreements with power users or power sales companies

As China targets to achieve its carbon neutrality goal before 2060, the Asian giant is getting its energy transition priorities in place, as per a new policy document released that identifies desert regionst to establish them as the bases for large scale solar and wind energy projects.

The document titled Opinions on Institutional Mechanisms and Policy Measures for Green and Low-Carbon Technologies specifies that the administration establish a land and space management mechanism to develop and utilize low-carbon energy in desert regions.

China has pledged to achieve over 1.2 TW wind and solar capacity by 2030, but the administration believes there needs to be institutional mechanisms and policy measures in place to achieve the ambition (see China NDC For 1.2 TW Wind & Solar By 2030).

Released by the National Energy Administration (NEA) and the National Development and Reform Commission (NDRC), it directs transmission and grid operators to give priority to renewable energy supply, at the same time to upgrade and transform existing coal power plants. It also aims to establish a long-term mechanism for the green development of coal mines, along with 'strictly and reasonably' control the growth of coal consumption.

In rural regions, China wants to promote and grid connect rooftop distributed solar power, biogas and biomass projects. It will encourage the use of land suitable for decentralized development of wind and solar PV generation in the rural areas. Efforts will also be made to encourage financial institutions to support renewable energy projects.

The administration will also conduct adaptability assessments of low-carbon energy with existing grid architecture, and promote breakthroughs in key core technologies. Research and innovation for a well-integrated energy system will be on the agenda too. Renewable energy projects will be encouraged to supply power to nearby industrial parks and businesses through innovative power transmission and operation methods, at the same time industrial parks will also be encouraged to purchase green energy through power market.

"Improve the power trading mechanism that is conducive to the preferential utilization of renewable energy, carry out green power trading pilot projects, and encourage new energy power generation entities to sign long-term power purchase and sales agreements with power users or power sales companies," reads the document.

The policy document will promote building integrated PV (BIPV) applications and support the use of solar energy among others sources, for renewable energy supply to buildings.

It will conduct a census and information sharing mechanism for low-carbon energy sources, right from the basic administrative unit to the provincial level to accurately identify how much and where all this capacity can be put up.

The Opinions on Institutional Mechanisms and Policy Measures for Green and Low-Carbon Technologies document in Chinese language is available on NEA's website.

In 2021, China installed a record 53 GW new solar PV capacity taking its cumulative to 306 GW. Local association China Electricity Council (CEC) expects the country to add another 90 GW in 2022 alone, a sentiment echoed by market research firm BloombergNEF that expects China to exit this year with 81 GW to 92 GW of new PV capacity driven by residential and commercial & industrial segments (see BloombergNEF: 228 GW DC New Solar In 2022).