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Wind: NEA Approves 2016 Wind Power Construction Plan
The NEA approved its wind power construction plan for 2016. There will be 30.8GW of new installed capacity. Of note, the Jilin, Heilongjiang, Inner Mongolia, Gansu, Ningxia, and Xinjiang provinces have had serious wind curtailment issues last year, and thus no new installed capacity was allotted in those regions. Additionally, the NEA announced nine points to increase the quality of project management, reporting standards, and overall transparency of the installation process. (NEA CN)
Source: NEA, Azure International
Following a record year in 2015 of new installed capacity, during which China installed 30,5GW of wind capacity, industry players have expected further development to be affected by decreasing feed-in tariffs. The new plan is likely to guide the sector's regional activity focus as well as the overall capacity volume. However, the actual outcome may vary considerably from the plan.
Carbon: Cross-Provincial Carbon Trading Noticed Approved by Beijing and Inner Mongolia
The municipal governments of Beijing and Inner Mongolia approved an inter-regional carbon emissions trading system. The city of Beijing will work with Hohhot and Ordos city to meet carbon trading quotas, including validated carbon emission reductions (VERs). Additionally, a cap of 5% excess peak emission was set for all companies, meaning companies can purchase 5% of their emissions as carbon credits after they exceed peak limits. (BJPC CN)
Hohhot and Ordos have over 26 companies who each produce 60,000 tons of carbon equivalent annually, and there is a need for them to purchase carbon credits to effectively tax their operations. These funds will go toward new carbon sequestration projects, and incentivize companies to pollute less.
Source: Carbon Emission Trading
Wind: NEA Announces New Offshore Wind Turbine Technical Requirements
The NEA announced new offshore wind turbine pile cap requirements. The regulations include the steel foundation pile materials, pile cap construction, inspection, and finished product standards. The standard is based off a one-year study to help drive product safety and quality in the offshore wind industry. (BJX CN)
Policy: Direct Trading Planned to Account for 30% of Industrial Electricity Consumption in 2016
A recently circulated draft opinion letter on the electricity market was published by the NEA on the 25th. The letter discusses direct trading goals for 2016 to 2020. This year, they expect 30% of industrial electricity consumption to participate in direct trading deals, which should reach 100% by 2018. Furthermore, they expect 100% of commercial electricity consumption to participate in direct trading deals by 2020. (BJX CN)
Direct trading could potentially be a major cornerstone of power sector market reform in China. The 30% of industrial consumption through trading represents roughly 20% of all power flows and seems ambitious given that for most provinces direct trading accounted for less than a few percent last year.