China considering quota system for renewable energy

Preventing a waste of renewable energy is behind China’s plan to protect this vital resource.

China is planning a renewable energy quota system that could require grid companies to transmit up to 15% of their power from renewable sources.

The new system, to be implemented in 2013, will be the first to require grid companies to get a percentage of their power from renewable energy.

Under the proposals, State Grid (China’s largest grid operator) will have a renewable energy quota of 5% by 2015, while the smaller China Southern Power Grid will have a quota of 3.2%. This compares to about 1.6% nationally in 2011.

The Inner Mongolia Power Company’s quota will be 15% while Shaanxi Electric Power Company will have a quota of 10%, said data from the National Energy Administration.

The quota system will particularly benefit wind developers. As much as 30% of wind power produced in some parts of China is wasted when grid operators deny access to their transmission networks.

A renewable energy quota system, often known as a renewable energy portfolio standard, has only been introduced in countries with more liberal power markets such as the UK, Australia and Japan. There is no active market in place in China to trade renewable energy quotas.

The quota system also includes solar and biomass but excludes hydropower.