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Interpretation of Law on Renewable Energy
 
  

Time: November 5, 2008

Energy is an important foundation for national economic development and basic material guarantee for human production and life necessity. On February 28, the 14th session of the 10th National People's Congress (NPC) Standing Committee adopted the Law on Renewable Energy, an important law to protect the comprehensive construction of affluent society in China.


What renewable energy includes:

Renewable Energy Law first defines the renewable energy, dividing renewable energy into various kinds, such as wind energy, solar energy, hydro-energy, biomass energy, geothermal energy and ocean energy. It also prescribes a series of supportive policies for development and use of renewable energy.

Theoretically and practically, all water energy is renewable energy. However, in view of the maturity and commercialization of large-and-medium hydropower stations, after referring to international experience, the related department has defined the water power station with the installing capacity of below 50,000 kilowatts as small hydropower station, which enjoys the same policy with renewable energy, such as wind energy and solar energy. The original draft by 13th session of the 10th National People's Congress (NPC) Standing Committee confirmed this provision. Due to disapproval from some members of the Standing Committee, after repeated studies, Law Committee of the National People's Congress holds that a provision about whether it is applicable to waterpower shall be made by the energy department of the State Council after further feasibility study before submitting it to the State Council for approval. On February 28, the 14th session of the 10th National People's Congress (NPC) Standing Committee accepted it in the adopted Law on Renewable Energy.


Full Purchase of Renewable Electricity by Power Grid Enterprises

Power grid enterprises provide convenience for power line communication of renewable electricity and fully purchase the renewable electricity up to standards, which is an important measure to make renewable energy power enterprises survive and to gradually enhance the competitiveness in energy market. Hereby this Law prescribes that the State encourages and supports renewable energy for the power combined to the grid to generate and that power grid enterprises shall sign with renewable energy power enterprises that have the legal administrative permit or have been reported and submitted to put on records, an agreement about power generation combined to the grid that they are to fully purchase electricity volume of projects of renewable energy power generation within the coverage of its electric fence, and to provide service to power line communication of renewable energy generation.

In consideration of the high cost of investment on renewable energy utilization at present, in order to develop technology and market, necessary support from the State is essential. Hereby the Renewable Energy Law respectively prescribes that it is to set up a special fund for renewable energy development, to provide a discount government loan for renewable energy development projects, to provide supportive policies such as tax preference to renewable energy projects which have been taken as the goal of renewable energy industry development.


Installation of Solar Energy Utilization System by Individuals Encouraged

The Law prescribes that the State encourages units and individuals to install and utilize solar water heating system, solar heating and cooling system, solar photovoltaic power generation system; the competent administrative department of construction under the State Council together with relevant departments shall establish technical and economic policies and technical regulations for the utilization of solar energy system in buildings; and real estate enterprises shall provide necessary conditions for solar system utilization in design and construction of buildings according to the technical regulation prescribed in the preceding articles.

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