China will increase power rates to subsidize green energy

New rates will start from September 25.

China will raise tariffs on power to collect subsidies for renewable energy in a bid for better quality air. The National Development and Reform Commission (NDRC) said the price adjustment will exclude residential and agricultural power.

The additional charge on power for clean energy will be US$0.0024 per kilowatt hour from current US$0.0013 per kilowatt hour.

The cost for renewable energy is relatively high and international practice is to subsidize the sector at its outset, said NDRC. China has charged a levy on wholesale power to build subsidy funds for renewable energy and the charging standard has increased from US$0.0002 per kilowatt hour in 2006 to US$0.0013 this year.

The NDRC can collect an additional US$3.24 billion annually, but there has been a shortfall in recent years as renewable energy has been growing quickly.

NDRC also announced it would improve subsidies for power plants on denitration from US$0.0013 per kilowatt-hour to US$0.0016 per kilowatt hour and add a new subsidy of US$0.0003 per kilowatt hour to power plants that cut dust emissions below 30 milligrams per cubic meter.