NEWS

Circular 4 Supplementary Notice for Questions and Answers about Biomass Power Generation

10.28, 2020
A few days ago, in order to promote the high-quality development of renewable energy and stabilize industry expectations, the Ministry of Finance, the National Development and Reform Commission, and the Energy Administration jointly issued a supplementary notice on issues related to the "Several Opinions on Promoting the Healthy Development of Non-aqueous Renewable Energy Power Generation" (Financial Construction [2020] No. 426, hereinafter referred to as "Supplementary Notice"). After the supplementary notice was issued, the Biomass Energy Industry Branch of the China Industry Development Promotion Association received a large number of calls from companies and investment institutions to inquire about biomass power generation projects (including agricultural and forestry biomass power generation, household waste incineration power generation, and biogas power generation, the same below). , After communicating with relevant departments, I now reply as follows:
 
Q
1. Is the supplementary notice for incremental biomass power generation projects or existing biomass power generation projects?
A
Answer: The supplementary notice issued this time covers all biomass power generation projects, and both incremental and stock projects are valid.
Q
2. How is the 15-year subsidy period determined?
A
Answer: The subsidy period of biomass power generation is based on the relevant regulations of the "Trial Measures for the Administration of the Price and Cost Allocation of Renewable Energy Power Generation" (Fagai Price [2006] No. 7). The method clearly states that "biomass power generation projects will enjoy subsidized electricity prices within 15 years from the date of commissioning; after 15 years of operation, subsidized electricity prices will be cancelled."
Q
3. How to determine the reasonable utilization hours for the whole life cycle of biomass power generation?
A
Answer: The reasonable utilization hours (82500 hours) of the whole life cycle of biomass power generation is the boundary condition used by the pricing authority when calculating the benchmark electricity prices of various biomass power generation. That is, when calculating the benchmark electricity price of agricultural and forestry biomass power generation at 0.75 yuan/kwh, the benchmark electricity price of household waste incineration power generation at 0.65 yuan/kwh, and the subsidy intensity of biogas power generation at 0.25 yuan/kwh, the number of hours of subsidized electricity used to calculate the electricity.
Q
4. Is the number of reasonable utilization hours in the entire life cycle in the supplementary notice the same concept as the usual utilization hours of biomass power generation equipment?
A
Answer: Not a concept. The number of reasonable utilization hours for the entire life cycle of the power generation project mentioned in the supplementary notice is mainly used to calculate the maximum on-grid electricity subsidy from the central government during the subsidy period of the renewable energy power generation project, that is, the project approved (recorded) installed capacity multiplied by Reasonable use of hours throughout the life cycle. And what we usually talk about is the annual utilization hours of biomass power generation equipment, which mainly refers to the average full-load operating time of the biomass power generation unit within a year.
Q
5. How to calculate the subsidy power and subsidy amount for agricultural and forestry biomass power generation?
A
Answer: Take an agricultural and forestry biomass power generation project with an installed capacity of 30MW and a central government subsidy intensity of 0.38 yuan/kwh as an example:
 
The subsidized power available for the entire life cycle of the project = 30MW x 82500 hours = 2.475 billion kWh, and the above-mentioned on-grid power has been accumulated during the subsidy period.
 
Projects within the subsidy period can enjoy the amount of central fiscal subsidy = 2.475 billion kwh x 0.38 yuan/kwh = 940.5 billion yuan.
 
If the project’s online power exceeds 2.475 billion kWh during the subsidy period, the excess part will no longer enjoy the central financial subsidy, but green certificates can be issued and allowed to participate in green certificate transactions. If the online power is less than 2.475 billion kWh during the subsidy period, the subsidy amount will be calculated based on the actual network power.
Q
6. How to calculate the subsidy power and subsidy amount for household waste incineration power generation?
A
Answer: Take the project's domestic waste treatment scale of 1,200 tons/day (incoming waste), 24MW steam turbine generator set, and the central government subsidy intensity of 0.18 yuan/kwh as an example:
 
The subsidized power available for the entire life cycle of the project = 24MW x 82500 hours = 1.98 billion kWh.
 
During the subsidy period, if the project wants to receive 1.98 billion kilowatt-hours of subsidized electricity (converted to 356.4 million yuan in subsidies), it needs to process domestic waste = 1.98 billion kwh ÷ 280kwh/ton waste = 707.143 million tons, with an average annual domestic waste treatment of 471,430 Tons, 1292 tons of domestic garbage are processed daily (calculated in 365 days).
 
During the subsidy period, the project can actually enjoy the central fiscal subsidy amount = 1,200 tons/day x 365 days x 15 years x 280kwh/ton of garbage x 0.18 yuan/kwh=33113 million yuan.
 
If the total amount of domestic waste processed by the project during the subsidy period exceeds 707.143 million tons, it means that the online subsidy power will exceed 1.980 billion kwh, and the excess power will no longer enjoy the central financial subsidy, but green certificates can be issued and allowed to participate in green certificate transactions . During the subsidy period, if the amount of domestic waste handled is less than 7,07143 million tons, the actual amount of waste handled is multiplied by 280 kWh to calculate the subsidized electricity.
 
Note: The "Notice of the National Development and Reform Commission on Improving the Price Policy for Waste Incineration Power Generation" (Fagai Price [2012] No. 801) is still valid. The notice clearly stipulates that “Waste incineration power generation projects using domestic waste as raw materials are first converted into on-grid electricity for settlement according to the amount of waste in the factory. The on-grid electricity per ton of domestic waste is tentatively set at 280 kWh, and will be implemented nationwide. The unified benchmark tariff for waste-to-energy generation is 0.65 yuan per kilowatt-hour (tax included); the remaining on-grid electricity follows the local on-grid tariff for similar coal-fired generating units."
Q
7. After the central government subsidy expires, will the provincial 0.1 yuan/kwh subsidy policy for household waste incineration power generation be retained?
A
Answer: At present, relevant departments have not made a clear statement. After the expiration of the central financial subsidy, in order to relieve local financial pressure and stabilize the investment expectations of waste-to-energy companies, it is recommended that the price authority retain the provincial 0.1 yuan/kwh subsidy policy until the concession period of the domestic waste incineration power generation project expires.
Q
8. How to calculate the subsidy power and subsidy amount for biogas power generation?
A
Answer: Take a biogas power generation project with an installed capacity of 4MW and a subsidy intensity of 0.25 yuan/kwh from the central government as an example:
 
The amount of subsidized electricity that can be obtained during the entire life cycle of the project = 4MW x 82500 hours = 330 million kWh, and the above-mentioned on-grid electricity has been accumulated during the subsidy period.
 
Projects within the subsidy period can enjoy the central government subsidy amount = 330 million kilowatt-hours x 0.25 yuan/kwh = 82.5 million yuan.
 
If the project’s on-grid electricity exceeds 330 million kWh during the subsidy period, the excess part will no longer enjoy the central financial subsidy, but green certificates can be issued and allowed to participate in green certificate transactions. If the online electricity consumption is less than 330 million kWh during the subsidy period, the subsidy amount will be calculated based on the actual online electricity consumption.
Q
9. What happens when the subsidy for biomass power generation projects expires?
A
Answer: According to the supplementary notice, biomass power generation projects included in the subsidy list will have on-grid electricity exceeding the total life cycle subsidized electricity part of the project or after 15 years from the date of connection to the grid, regardless of whether the project reaches the full life cycle subsidy electricity or not. No longer enjoy central financial subsidies, issue green certificates, and allow participation in green certificate transactions.
Considering that the current green certificate trading market is still immature, once biomass power generation projects lose electricity price subsidy support, they will face the risk of shutdown. At the same time, in view of the local rigid demand for urban and rural organic waste disposal, in order to fully reflect the environmental, livelihood and social value of biomass energy, after the expiration of the central financial subsidy, it is recommended that the price department retain the original electricity price for biomass power generation, and the provinces should resolve the electricity price contradiction. , To solve the part of the biomass electricity price higher than the local benchmark on-grid electricity price until the green certificate trading market matures.
Q
10. What is a green certificate?
A
Answer: Green certificate, namely green power certificate. It is an electronic certificate with a unique identification code issued by the state for every MWh of non-aqueous renewable energy on-grid electricity generated by a power generation company. It is the confirmation and attribute certification of the non-aqueous renewable energy generation and the only certificate for the consumption of green electricity. The current green certificate transactions are all conducted on the China Green Energy Certificate Subscription and Trading Platform (http://www.greenenergy.org.cn/).