Inefficient and dirty power plants to be penalized in effort to meet emissions targets
Eric Nig in Beijing
The mainland, the worldās largest burner of coal, will start using market-economy measures to promote energy conservation and cut emission from power plants, according to senior industry regulations.
The new policy will limit sales by inefficient power plants and give clean energy project preference for sales to power grids.
āThe government will soon issue a document on energy conservation and emission reduction through market economy means,ā Wang Qiang(ēå¼ŗ), director-general of the Sale Electricity Regulatory Commissionās department of policy and regulations, said at the China Power And Alternative Energy Summit. The document should come out this year, he said, but declined to give details.
The curbs will hurt the profitability of heavy-polluting plants and pressure on owners to close or renovate them.
The central government, which has already set ambitious target to boost the use of clean energy such as nuclear and wind power, is under pressure at home to cut pollution after failing last year to cut energy consumption per unit of GDP by 4 per cent and reduce emissions by 2 per cent. The targets were set under the 11th Five-Year Programme.
The country, already the wordās largest emitter of acid-rain-causing sulfur dioxide, also faces pressure overseas as it is forecast to surpass by 2009 the US as the top emitter of carbon dioxide, the main greenhouse gas behind global warming.
The power sector is responsible for more than half of the mainlandās total air pollutants and more the 60 per cent of carbon dioxide emissions.
Listed power companies may be beneficiaries of new policy, as they tend to have newer and more fuel-efficient plants. Existing agreements between producers and grid companies do not take account emission levels or energy efficiency.
The mainlandās two power grid companies are wholly state-owned and are monopolies in their operating regions, which will ease implementation of the new policy.
Implantation of earlier measure, such as using tariff subsidies and emission charges to encourage power producers to install sulfur-filtering equipment, has been poor due to lax monitoring. Some power plants with tariff subsidies have used their pollution-control equipment only intermittently to save costs.
As part of its push to cut pollution, the government passed a law early last year requiring power distributors to buy all the power generated by renewable energy projects.
Preferential policies also encourage construction of such project in poorer interior regions that are often rich in hydro and wind resources.
A central government fund, financed by a national tariff increase, which will subsidise the tariff gap between more expensive renewable energy and the national average tariff.
Wealthier regions will have to help poorer regions in connecting renewable projects to power grids under a central government plan that should be put into action by the end of June, said Huang Shaozhong, deputy director-general of the corn-missionās department of tariffs and financial regulation.
Premier Wen Jiabaoļ¼ęø©å®¶å®ļ¼, head of a team set up this year to tackle pollution, said the government would cut loads and land supply to dirty and energy-inefficient heavy industries and raise tariffs on their exports. |
