The Chinese National Energy Administration of the National Development and Reform Commission has announced that development of wind power and photovoltaic power generation are now, in some regions, acquiring on-grid parity of coal-fired benchmarks.

As a result, a number of solar and wind power projects with an estimated grid-connected electricity price lower than the coal-fired benchmark on-grid price are to be constructed.

The shift follows general subsidy reduction globally, as renewables become more efficient and cheaper, including proposals to withdraw Government subsidies for green energy projects in the UK and review feed-in tariffs.

For China, both a leader in electricity production from renewable energy sources (ahead of the US) and also a major emitter of CO2 (as with renewable energy approximately twice that of the US) the logic of moving to self-funding renewable production is clear. To this end, the move will actively encourage ‘innovative’ financial support methods from the National Development Bank and the four state-owned commercial banks including arranging credit funds, innovate financial services and financial products, and the issuance of corporate bonds.

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