Offshore Wind Worldwide 2022 edition - Flipbook - Page 36
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The Renewable Energy Development Fund
set up by the MOF provides central
government’s subsidies for offshore wind
power projects.
The central government’s subsidies will be
granted based on the reasonable utilisation
hours, which are estimated at 52,000 hours
for the full life cycle of offshore wind power
projects. The subsidised electricity amount
of one offshore wind power project for the
full life cycle (Subsidised Amount) should be
equal to the project capacity multiplied by
52,000. When the reasonable utilisation
hours for the full life cycle are not exceeded,
subsidies will be provided based on the
actual power generation capacity. However,
if the power generated exceeds the
Subsidised Amount, the amount in excess of
the Subsidised Amount will not receive
central government’s subsidies. It is worth
noting that for all the offshore wind power
projects eligible for central government’s
subsidies, the central government’s subsidies
will no longer be applicable after 20 years
from the date on which the project was
connected to the grid, regardless of whether
the Subsidised Amount has been used up.
The amount of the subsidies is equal to an
amount (Premium) calculated as below: (OnGrid Tariff the Grid Company pays to
purchase the electricity generated by the
plant - benchmark tariff applicable to
electricity generated by coal-fired power
plants)/(1 + applicable rate of value-added
tax). The benchmark tariff applicable to
electricity generated by coal-fired power
plants is set by the NDRC or its local
counterparts (Local NDRC) periodically
Hogan Lovells
China
pursuant to the Notice on Reducing the
On-grid Coal-fired Power Tariff and General
Industrial and Commercial Electricity Tariff
and Circulars and Notices on Matters
Concerning Reasonable Adjustment of the
Electricity Price Structure issued by the
Local NDRC. The plant receives the whole
amount of the On-Grid Tariff (including the
Premium) from the Grid Company and the
Grid Company in turn applies to receive the
reimbursement of the Premium from the
Renewable Energy Development Fund.
However, the Healthy Development
Opinions also provide that the central
government does not make subsidies
available to newly installed offshore wind
power projects, except for the existing
offshore wind power projects which have
obtained the required project approvals and
for which grid connection has been
completed prior to 31 December 2021. In
order to continue promoting the
development of offshore wind power
projects, local governments may provide
subsidies for projects within their respective
sea areas. For example, the People’s
Government of Guangdong Province has
released an implementation plan on 1 June
2021, announcing that the People’s
Government of Guangdong Province will
provide subsidies to projects within the sea
areas of Guangdong Province that are not
eligible for national subsidies. This
provincial subsidy applies to projects that
have been approved before 31 December
2018 and for which grid connection will be
completed during the period from 2022 to