Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 50
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the tariff) – among these parameters, the
tariff bears a weighting factor of no less
than 40% (but it is not the decisive factor).
Alternatively, for Pre-identified Developer
Projects, the Local NEA can adopt a method
whereby the technological aspects of the
project are considered in the first instance
and the tariff in the second instance.
2.3. Incentives for investments
In China, the state power network operators that operate the power grids to which
offshore wind power plants are connected
(Grid Companies) (i.e., the State Grid Corporation of China, the China Southern Power
Grid, and certain local independent grid
companies) are required to purchase the
entire output of the offshore wind power
plant. This is different from onshore wind
power projects in which (depending on the
case) the Grid Companies may be required
to purchase a minimum guaranteed amount
as required by the local NEA.
The Grid Company to which the offshore
wind power plant is connected purchases
the electricity produced by the plant by
paying a fixed feed-in tariff to the plant (OnGrid Tariff). The NDRC sets and announces
the maximum amount of the On-Grid Tariff
from time to time (it has set this amount in
2014, 2017 and 2019 respectively so far). The
maximum amount of the On-Grid Tariff set
by the NRDC is denominated "benchmark
on-grid tariff" on and before 30 June 2019
(Wind Power Benchmark Tariff) and "guiding
wind power tariff" on and after 1 July 2019
(Guiding Wind Power Tariff), respectively.
China
As to the projects awarded pursuant to
the Competitive Allocation Scheme, the
On-Grid Tariff is set out in the bidding
documents and cannot be higher than the
applicable Wind Power Benchmark Tariff
or Guiding Wind Power Tariff (Bid Tariff), as
applicable. The On-Grid Tariff of offshore
projects approved and/or filed after 2021 is
decided by the provincial level price control
authorities; the On-Grid Tariff can be formulated pursuant to the Competitive Allocation Scheme if relevant conditions can be
met. If the On-Grid Tariff is higher than the
local benchmark price of coal-fired power
generation, the part within the local benchmark price of coal-fired power generation
will be settled by the Grid Company.
As discussed in section 1.3 above, according
to the Healthy Development Opinions, the
Renewable Energy Development Fund set
up by the MOF provides central government’s subsidies 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. The central
government’s subsidies are 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
are provided based on the actual power
generation capacity. However, if the power
