China boosts renewable power subsidies 7.5% to $13b

Bloomberg

China boosted its budget for renewable power subsidies to 92.36 billion yuan ($13 billion), 7.5% more than it spent last year.
Solar power is the big winner, with incentives set to rise 14% compared to last year’s level, while wind payments will be 3.2% lower, the Ministry of Finance said on its website. The subsidy budget would cover existing projects plus any new developments that meet eligibility criteria.
Solar’s allocation was higher than expected, which is “positive for both the photovoltaic equipment value chain as well as solar farm operators,” said Tony Fei, an analyst at BOCI Research Ltd in Hong Kong. But “wind farm operators might see a slight marginal decline in subsidies for existing projects.”
Solar projects will get 42.84 billion yuan, while wind will get 35.69 billion yuan. The remainder of the budget is for biomass power and funding to local governments for grid companies.
Applications for new solar power projects that will compete for national subsidies rose 36% to 33.5 gigawatts in 2020, the National Renewable Energy Information Management Center said separately. Last year China decided to subsidise 22.8 gigawatts of the 24.6 that were submitted.
Last year China spent 85.92 billion yuan total on renewable subsidies. The payments are financed by a surcharge on electricity bills.
Even with the increased budget, there won’t be enough money to go around, said Robin Xiao, an analyst at CMB International Securities Ltd.
China has subsidised renewable energy for years, which allowed it to add more capacity than anywhere else in the world. Based on the subsidised tariffs it offered, and the amount of power expected to be produced, the total bill for renewable subsidies should be about 200 billion yuan this year, Xiao said.
Most of China’s renewables are developed by state-owned firms, but that gap between subsidies owed and paid has hurt valuations of companies traded publicly outside mainland China. China Datang Corp Renewable Power Co and China Longyuan Power Group Corp. trade below their book value in Hong Kong, in part
because they are owed so much by the government, according to Xiao.
The government is also trying to reduce the number of new projects that are eligible for subsidies, as it wants them to be able to compete against dominant coal power on price alone. Subsidies for onshore wind will be phased out after this year, with offshore wind following from 2022.

‘China’s CO2 emissions grow fastest since 2011’
Bloomberg

China’s carbon dioxide emissions from fossil fuels grew by 319 million tons last year, or 3.4%, the most since 2011, according to data from BP Plc’s annual Statistical Review of World Energy.
Consumption of oil and natural gas in the world’s biggest energy user rose to record levels, while coal also grew, though not enough to surpass the amount it burned in 2013, according to the data.
The increased emissions of greenhouse gases came even as China’s economic growth by the end of the year had ground to the slowest since at least the early 1990s.
The outlook for emissions by the world’s biggest polluter have been upended by the coronavirus pandemic, which brought industrial activity to a halt earlier in the year. More recently there have been signs of an increasingly strong rebound, including record oil imports and power generation growing at the fastest level since September. As well, the sluggish activity at the end of 2019 had already prompted Beijing to relax some environmental restrictions.