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Official Announcement | In 2020, the installed capacity of wind power projects achieving grid parity reached 11.3967 million kilowatts.
Release date:
2020-07-28
Notice from the General Office of the National Development and Reform Commission and the Comprehensive Department of the National Energy Administration on Announcing the 2020 Wind and Photovoltaic Power Generation Projects Entitled to Grid Parity Pricing NDRC Energy [2020] No. 588 To the Development and Reform Commissions and Energy Bureaus of all provinces, autonomous regions, municipalities directly under the central government, and the Xinjiang Production and Construction Corps; to the National Energy Administration’s dispatched agencies; and to State Grid Corporation of China, China Southern Power Grid Company Limited, Inner Mongolia Electric Power (Group) Co., Ltd., the Electric Power Planning & Design Institute, the Hydroelectric and Water Resources Planning & Design Institute, and all relevant power generation enterprises: In accordance with the "National Development and Reform Commission and National Energy Administration’s Guidelines on Actively Promoting Subsidy-Free, Grid-Parity Wind and Photovoltaic Power Generation Projects,"
Notice from the General Office of the National Development and Reform Commission and the Comprehensive Department of the National Energy Administration on Announcing the 2020 Wind and Photovoltaic Power Projects for Grid Parity
NDRC Energy Office [2020] No. 588
Development and Reform Commissions and Energy Bureaus of all provinces, autonomous regions, municipalities directly under the central government, and the Xinjiang Production and Construction Corps; all branch offices of the National Energy Administration; State Grid Corporation of China, China Southern Power Grid Company Limited, Inner Mongolia Electric Power (Group) Co., Ltd., Electric Power Planning & Design Institute, Hydroelectric and Water Resources Planning & Design Institute, and relevant power generation enterprises:
In accordance with the "Notice from the National Development and Reform Commission and the National Energy Administration on Actively Promoting Subsidy-Free, Competitive Grid Parity for Wind and Photovoltaic Power Generation" (NDRC Energy [2019] No. 19) and the "Notice on Relevant Matters Concerning the Construction of Wind and Photovoltaic Power Projects in 2020" (NEA New Energy [2020] No. 17), and based on information submitted by provincial energy authorities, the installed capacity of wind power projects achieving grid parity in 2020 totals 11.3967 million kilowatts, while photovoltaic projects at grid parity reach an installed capacity of 33.0506 million kilowatts. These figures are hereby announced.
Please ensure that the relevant project entities expedite the development and construction of wind and photovoltaic power projects aiming for grid parity. The first batch of 2019 and the 2020 wind and photovoltaic projects seeking grid parity must secure approval (or filing) and commence construction by the end of 2020. Additionally, with the exception of cases where grid integration and power consumption are constrained, wind power projects should be connected to the grid by the end of 2022, while photovoltaic projects must achieve grid connection by the end of 2021.
The National Energy Administration will annually review and publicly announce wind and photovoltaic projects that have successfully achieved grid parity within the specified timelines. Any projects failing to meet these deadlines will be removed from the lists of the first batch of 2019 and the 2020 wind and photovoltaic projects eligible for grid parity.
Please ensure that grid enterprises diligently fulfill their responsibilities in constructing grid connection projects, as required by policies for affordable grid-parity projects. This includes prioritizing power generation and guaranteeing full off-take for these projects. Additionally, they should enter into long-term, fixed-price Power Purchase Agreements (PPAs) with wind and photovoltaic power projects at the locally benchmarked coal-fired electricity prices approved by the state at the time of project approval—contracts that must last for no less than 20 years.
Please coordinate and advance the implementation of relevant project construction through collaboration between provincial energy authorities and the National Energy Administration's regional offices, while also strengthening oversight to ensure the effective execution of supporting policies.
Attachment: 1. Summary Table of 2020 Wind and Photovoltaic Power Generation Projects Achieving Grid Parity
2. Information Table of Proposed Affordable Grid-Connection Projects for 2020
3. Overview of Adjustments to 2019 Grid-Parity Project Information
General Office of the National Development and Reform Commission
Comprehensive Department of the National Energy Administration
July 31, 2020
Attachment 1:
Policy Interpretation of the "Notice from the General Office of the National Development and Reform Commission and the Comprehensive Department of the National Energy Administration on Announcing the 2020 Wind Power and Photovoltaic Power Generation Projects Entitled to Grid Parity Access"
The National Development and Reform Commission and the National Energy Administration recently jointly issued the "Notice on Announcing 2020 Wind Power and Photovoltaic Power Generation Projects Entering the Grid at Parity Prices" (hereinafter referred to as the "Notice"). We now provide an interpretation of the notice, covering its background, significance, and key contents.
I. Background of the Notice
With the large-scale development of wind and photovoltaic power generation, coupled with rapid technological advancements, regions boasting superior resources, low construction costs, and favorable investment and market conditions have largely reached the point where they can achieve grid parity with benchmark coal-fired power prices—meaning they no longer require government subsidies.
In January 2019, the National Development and Reform Commission (NDRC) and the National Energy Administration jointly issued the "Notice on Actively Promoting Subsidy-Free, Grid-Parity On-grid Power Generation for Wind and Photovoltaic Projects" (Document No. 19 [2019] of the NDRC & NEA, referred to as "Document 19"). This document outlines 12 key measures aimed at advancing pilot projects for wind and photovoltaic power generation to achieve grid parity, including optimizing the investment environment, ensuring priority dispatch and full guaranteed purchase of electricity, encouraging green certificate trading to secure reasonable revenue compensation, holding grid companies accountable for building and upgrading grid infrastructure, reducing transmission and distribution tariffs for local direct transactions, and exploring innovative financial support mechanisms.
Additionally, the notice specifies that energy authorities in each province (autonomous region, or municipality directly under the central government) are responsible for submitting project information to the National Energy Administration. Meanwhile, the NDRC and NEA will promptly publish a list of grid-parity projects and coordinate closely with relevant stakeholders to ensure the effective implementation of supporting policies.
In May 2019, the NDRC and NEA compiled project data submitted by energy authorities across provinces, regions, and municipalities, rigorously reviewed the information, and officially released the first batch of 2019 wind and photovoltaic power generation projects eligible for grid parity, totaling 20.76 million kilowatts in capacity.
In March 2020, the National Energy Administration issued the "Notice on Matters Relating to the Construction of Wind Power and Photovoltaic Power Projects in 2020" (NEA New Energy [2020] No. 17), clearly stating that by 2020, provincial-level energy authorities should actively organize and prioritize the development of competitive, subsidy-free wind and photovoltaic power projects aimed at achieving grid parity. Project details were required to be reported to the National Energy Administration, with a copy sent to the local branch offices. The Administration would promptly compile and publicly release this information as needed. Any adjustments to the first batch of project lists issued in 2019 also had to be submitted simultaneously. As of June 28, 2020, the National Energy Administration had received reports from 21 provincial energy authorities and the Xinjiang Production and Construction Corps regarding their 2020 wind and photovoltaic projects designed for grid parity. After careful review, these projects were compiled into an official list and formally announced to the public via the "Notice."
II. The Significance of the Notice
The "Notice" primarily announces the 2020 wind and photovoltaic power projects that will achieve grid parity, along with clarifying relevant requirements. Overall, the issuance and implementation of the "Notice" carry significant importance, as reflected in "four key benefits."
(1) This will help accelerate the process of achieving grid parity for wind and photovoltaic power generation. The pilot projects under Document No. 19, which have been explicitly designated as eligible for grid parity, will no longer receive government subsidies—but they will benefit from supportive, incentive-based policies. By announcing parity projects for two consecutive years, these initiatives leverage the clear support measures outlined in Document No. 19 to encourage wind and photovoltaic power companies to actively reduce costs and speed up the transition toward subsidy-free, grid-parity operations.
(II) This will help enhance the market competitiveness of China’s wind and photovoltaic power industries. By supporting policies that encourage enterprises to implement pilot projects for grid parity, we can drive companies to accelerate innovation in technology, products, management, and business models. Additionally, this initiative will prompt relevant stakeholders to optimize the business environment, reduce non-technical costs, and ultimately strengthen the market competitiveness of China’s wind and photovoltaic sectors—enabling them to achieve cost parity with traditional fossil-fuel-based power generation at an early stage.
(III) This initiative will help accelerate the energy transition, supporting the development of a clean, low-carbon, safe, and efficient energy system. By organizing and implementing wind power and photovoltaic projects that achieve grid parity without subsidies, we will further expand the installed capacity and electricity generation from renewable sources, increase the share of non-fossil fuels in total primary energy consumption, and ultimately drive the energy transition and foster high-quality economic growth.
(Four) This will help effectively implement the "Six Stabilizations" and fulfill the "Six Guarantees" tasks. Preliminary estimates indicate that the proposed 2020 wind and photovoltaic power projects, set to be connected to the grid at competitive prices, will stimulate total investments of approximately 220 billion yuan and create numerous new job opportunities—making a tangible contribution to stabilizing investment, boosting economic growth, and securing employment.
III. Key Contents of the Notice
(1) Announcement of the 2020 List of Wind and Photovoltaic Power Projects Achieving Grid Parity
After analysis, a total of 26.6467 million kilowatts of affordable wind power projects and 33.0506 million kilowatts of affordable photovoltaic projects have been reported by 21 provinces (autonomous regions, municipalities) and the Xinjiang Production and Construction Corps. Among these, 11.3967 million kilowatts of affordable wind power projects and 33.0506 million kilowatts of affordable photovoltaic projects have already secured grid connection and consumption agreements.
Considering that Document No. 19 explicitly states that parity projects should be developed only after grid enterprises have committed to ensuring grid connection and power consumption conditions, the "Notice" includes 11.3967 million kilowatts of approved wind power projects and 33.0506 million kilowatts of approved photovoltaic projects—both already confirmed to meet grid connection and consumption requirements—into the 2020 list of wind and photovoltaic power generation projects eligible for grid parity, which is now officially released.
Additionally, the Notice also announced changes to the information for the first batch of seven affordable projects in 2019, primarily located in the four provinces of Shanxi, Heilongjiang, Jiangsu, and Guangdong.
(II) Clearly define the construction timeline requirements for the two batches of affordable projects in 2019 and 2020.
Document No. 19 clearly states that for wind and photovoltaic power projects approved and started by the end of 2020 as per the notice requirements—whether they are grid-parity or low-price projects—the relevant supportive policies will remain unchanged throughout the project's operational period. Therefore, all wind and photovoltaic power projects explicitly included in this round of grid-parity project list under the Notice must be approved (or filed) and commence construction by the end of 2020.
To prevent delays in project construction after being included on the list of affordable projects, which could lead to wasted grid-connected capacity and resource utilization, and considering the reasonable construction timelines for wind and photovoltaic power projects, the Notice stipulates that, except for cases where grid connection and consumption are constrained, wind power projects must be connected to the grid by the end of 2022, while photovoltaic projects should achieve grid connection by the end of 2021. Additionally, it clarifies that the first batch of affordable projects announced in 2019 will also be organized for construction according to these requirements.
(III) Establish a dynamic tracking and adjustment mechanism. To substantively advance the construction of affordable projects listed on the roster, the Notice clarifies that the National Energy Administration will annually review and publicly announce wind and photovoltaic power generation projects that have been connected to the grid within the specified timeframe. Wind and photovoltaic projects that fail to meet this deadline will be removed from the first batch of 2019 and subsequent 2020 lists of affordable grid-connected projects, thereby losing eligibility for the supportive policies outlined in Document No. 19.
(IV) Emphasizing Supportive Policy Measures
To ensure the smooth grid connection and consumption of wind and photovoltaic power projects at parity prices, as well as to safeguard reasonable project revenues, the Notice clearly states that grid enterprises must fulfill their responsibilities for constructing grid-connected infrastructure in accordance with the requirements outlined in Document No. 19. This includes prioritizing power generation from parity projects and guaranteeing full, guaranteed off-take. Additionally, grid companies are required to sign long-term, fixed-price Power Purchase Agreements (PPAs) with wind and photovoltaic power projects at parity pricing—contracts lasting no less than 20 years—to provide robust policy support for the construction and operation of these projects.
IV. Next Steps
Following the issuance of the "Notice," we will promptly organize energy authorities in all provinces (autonomous regions and municipalities) to efficiently carry out the approval (filing) process for 2020 wind and photovoltaic power projects that achieve grid parity. We will also strengthen coordination with departments such as land resources and environmental protection, working together to help reduce non-technical costs. Meanwhile, we will rigorously monitor project development and construction information, enhance oversight of project progress, and create an optimal environment to support the commencement, construction, grid connection, and operation of wind and photovoltaic power projects that have reached grid parity.
Source: Wind Energy Industry
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