China will start building pilot wind and solar power projects that won’t receive national government payments as it pushes to improve the competitiveness of renewable energy and rein in subsidy bills. Shares of solar manufacturers surged in New York and Hong Kong.
Power prices from these pilot projects will be the same or lower than from coal-fired plants, the National Development & Reform Commission said in a statement laying out the policy on Wednesday. Subsidy-free plants may be exempt from participating in some power market transactions and will sign long-term power purchase agreements with grids at fixed tariffs, it said.
Regulators are seeking to cut the nation’s surplus renewable power capacity, as well as its hefty subsidy bill, which followed its green energy investment boom. The government rattled the market last year when it decided to curb financial aid to solar developers to slow record growth rates and integrate existing capacity into the grid.