China to cease onshore wind power subsidies by 2021

Tariffs paid to onshore wind projects will be cut to as low as $0.0420/kWh in 2020.

China will end subsidies for new onshore wind power projects by 2021 as it looks to even the playing field for renewables going up against coal and gas-fired electricity, a report by Reuters revealed.

China pays a relatively high tariff per kWh of electricity produced by wind or solar projects, but it has been promoting what is known as ‘grid price parity’ with traditional sources of power such as coal.

Also read: China greenlights first round of subsidy-free wind and solar projects

The National Development and Reform Commission (NDRC) said tariffs paid to onshore wind projects will be cut to as low as $0.0420 (RMB0.29) per kWh in 2020, whilst grid price parity will apply to all new projects from 1 January 2021

It said the tariff adjustments beginning in 2019 were designed to ensure wind power could reach the same price level as coal-fired power, and also promote fair competition in the sector.

China has been scaling back subsidies for both wind and solar projects after a rapid fall in equipment and construction costs, as well as a huge subsidy payment backlog for existing projects.

China also launched a series of subsidy-free wind and solar projects in January, noting that solar construction costs in China fell 45% from 2012 to 2017, whilst wind project costs dropped 20% over the same period.

Read the full report here.