Relevant Provisions for the Administration of the Generation of Electricity Using Renewable Energy Resources

(Issued by the National Development and Reform Commission on, and effective as of, January 5 2006.)

Fa Gai Neng Yuan [2006] No.13

PART ONE: GENERAL PROVISIONS

Article 1: These Provisions have been formulated pursuant to the PRC Renewable Energy Law and the PRC Electric Power Law in order to promote the development of the industry for the generation of electricity using renewable energy resources.

Article 2: For the purposes of these Provisions, the generation of electricity using renewable energy resources shall include the generation of electricity using hydropower, wind power, biomass (including the generation of electricity through the direct burning or the gasification of agricultural and forestry waste, the generation of electricity through the burning of garbage or the use of landfill gas and the generation of electricity using methane), solar energy, geothermal energy and ocean energy.

Article 3: These Provisions shall apply to projects for the grid connected generation of electricity using renewable energy resources for which administrative permission has been obtained in accordance with the law and the provisions of the State Council and projects for the stand alone generation of electricity using renewable energy resources in regions not yet covered by a grid.

Article 4: Administration of projects using renewable energy resources to generate electricity shall be divided between the central and local levels.

The National Development and Reform Commission will be in charge of the planning of projects using renewable energy resources to generate electricity nationwide, policy formulation and the administration of projects that require check/examination and approval by the state. The competent energy departments of provincial level people's governments shall be responsible for the administration of those projects using renewable energy resources to generate electricity that are within their jurisdictions and fall under the authority of the locality.

The plans for the generation of electricity using renewable energy resources shall be included in the electric power plans at the same level.

PART TWO: PROJECT ADMINISTRATION

Article 5: The development and use of renewable energy resources shall abide by the principle of construction in accordance with the plan. When formulating plans for the generation of electricity using renewable energy resources, such factors as the features of the resources, market demand and protection of the ecological environment shall be fully taken into consideration and focus shall be placed on taking advantage of resource strengths and the merits of scale. Project construction shall comply with the overall requirements of development plans of the provincial level and above and the geographical distribution of such construction, so as to achieve reasonable and orderly development.

Article 6: Hydroelectric projects constructed on main water courses, hydroelectric projects of 250,000kW and above and wind power projects of 50,000kW and above shall be subject to the examination and approval of the National Development and Reform Commission. Other projects shall be subject to the check/examination and approval of the competent investment departments of the provincial level people's governments and reported to the National Development and Reform Commission for the record. Submissions for biomass projects, geothermal projects, ocean energy projects and solar power projects that require state policy and funding support shall be made to the National Development and Reform Commission.

Article 7: Prices for electricity uploaded to grids by projects using renewable energy resources to generate electricity shall be determined by the State Council's pricing department based on the features of the different types of renewable energy resources used to generate electricity, the circumstances of different regions and the principles of promoting the development and use of renewable energy resources and economic rationality, and shall be revised and published in a timely manner by the State Council's pricing department based on the development of the technology for the development and use of renewable energy resources.

Prices for electricity uploaded to grids by projects using renewable energy resources to generate electricity that require invitations of bids shall be handled in accordance with the prices determined in the winning bids. The extra costs incurred by grid enterprises that purchase and sell electricity generated from renewable energy resources other than hydropower shall be shared by all users of electric power on a nationwide scale. The specific measures therefor shall be formulated separately.

Article 8: The National Development and Reform Commission will be in charge of formulating the measures for the administration of the statistics on the generation of electricity using renewable energy resources. The competent energy departments of the provincial level people's governments shall be responsible for the administration of the statistics on the generation of electricity using renewable energy resources and the collation thereof, and shall submit the same to the National Development and Reform Commission by February 10 of each year.

Article 9: The State Electricity Regulatory Commission will be responsible for the regulation of the operations of enterprises that use renewable energy resources to generate electricity, coordinating the relationship between electric power generation enterprises and grid enterprises and regulating the generation of electricity using renewable energy resources, the uploading of such electricity to grids and the settlement thereof.

PART THREE: RESPONSIBILITIES OF GRID ENTERPRISES

Article 10: Grid enterprises at the provincial level and above shall formulate plans for the construction of ancillary grid facilities to accommodate electricity generated using renewable energy resources based on the mid to long-term plans of the people's governments at the provincial level and above for the generation of electricity using renewable energy resources, and the same shall be included in the state and provincial level grid development plans and implemented after approval by the relevant provincial level people's government and the National Development and Reform Commission.

Article 11: Based on plan requirements, a grid enterprise shall actively conduct discussions on grid design and research and proceed with grid construction and improvements based on the progress in and requirements of the construction projects using renewable energy resources to generate electricity so as to ensure that all electricity generated using renewable energy resources is uploaded to the grid.

Article 12: The access systems for projects for the grid connected generation of electricity using renewable energy resources shall be constructed and managed by the grid enterprise.

The access systems for medium and large projects using such renewable energy resources as hydropower, wind power, biomass, etc. to generate electricity and that directly connect to a power transmission grid shall be invested in by the grid enterprise and the ownership boundary point shall be at the first pole (tower) outside the booster station of the power station (plant).

The access systems for small projects using such renewable energy resources as solar power, methane, etc. to generate electricity and that directly connect to a power distribution grid shall in principle be invested in and constructed by the grid enterprise. Following consultations with the grid enterprise, the electric power generation enterprise (individual) may also invest in and construct such system.

Article 13: A grid enterprise shall be responsible for metering and keeping statistics on the electricity generated using renewable energy resources that it purchases. Provincial level grid enterprises shall collate and submit the same to the competent energy department of the relevant provincial level people's government by January 20 of each year, with a copy to the National Development and Reform Commission.

PART FOUR: RESPONSIBILITIES OF ELECTRIC POWER GENERATION ENTERPRISES

Article 14: Electric power generation enterprises shall actively invest in and construct projects using renewable energy resources to generate electricity and bear, as their obligations, the quotas for the generation of electricity using renewable energy resources specified by the state. Power generation quota targets and the measures for the administration thereof shall be formulated separately.

Large electric power generation enterprises shall invest in projects using renewable energy resources to generate electricity on a priority basis.

Article 15: The construction, operation and management of projects using renewable energy resources to generate electricity shall comply with relevant laws, regulations, technical standards, rules and guidelines of the state and the electric power industry and shall focus on economizing on land and satisfying environmental protection, safety and other such requirements.

Article 16: Electric power generation enterprises shall duly carry out the design, land use, water resource and environmental protection related preliminary preparatory work in accordance with relevant state provisions on the administration of projects using renewable energy resources to generate electricity and obtain the administrative permissions in accordance with the law. Construction may not commence without such permissions.

Construction of, and the generation of electricity by, projects for which administrative permission has been obtained shall commence and be achieved by the prescribed deadlines. A project may not be transferred or auctioned off or have an investor replaced without the consent of the original permission granting department for the project.

Article 17: The construction of projects using renewable energy resources to generate electricity shall be carried out in strict accordance with relevant state provisions on the administration of capital construction projects, environmental protection, ecological construction, water and land preservation and other such measures shall be put into place, and management of construction shall be strengthened in order to ensure project quality.

Article 18: Electric power generation enterprises shall install qualified power generation metering systems and shall, by January 15 of each year, report to the competent energy department of the relevant provincial level people's government its installed capacity, electricity output and quantity of electricity uploaded to the grid during the previous year.

PART FIVE: SUPPLEMENTARY PROVISIONS

Article 19: In the event of a dispute between a grid enterprise and an electric power generation enterprise, an application may be submitted, depending on the reason, to the National Development and Reform Commission or the State Electricity Regulatory Commission for mediation. If mediation is not accepted, the dispute may be resolved by instituting a civil suit.

Article 20: If an enterprise or the state incurs a loss due to a failure to act in accordance with these Provisions, the audit firm appointed by the National Development and Reform Commission or the relevant provincial level people's government shall conduct an audit to determine the loss, and compensation shall be paid for the loss based on the determined amount thereof. The relevant measures for fines shall be formulated separately.

Article 21: These Provisions shall be effective as of the date of issue.

Article 22: The National Development and Reform Commission is in charge of interpreting these Provisions.