A top Chinese energy policy official said Friday that there is no need for additional renewable energy subsidies, and rejected calls for a minimum wind power price.
"Calls to set renewable energy prices at a high level through a fixed government price are mainly coming from investors," Zhang Guobao, vice minister of the National Development and Reform Commission, said at a press briefing. "But the result, if prices are fixed too high, would be to impact the widespread use of renewable energy."
Zhang also dismissed a Ministry of Finance study this week calling for the imposition of carbon taxes, saying it is just a proposal from an independent research organization.
Renewable energy prices, and in particular wind power prices, should be set through a competitive market, said Zhang, who is also the chief of the National Energy Administration.
Current prices for wind power, at around 0.5 to 0.6 yuan per kilowatt hour, are "reasonable," and are higher than coal power prices, Zhang said. Preferential policies for wind projects also exist in the form of lower tax rates, he said.
Currently, local wind power turbine makers qualify for a subsidy on the first 50 units capable of generating 1.5 megawatts or more, worth CNY600 per kilowatt.
Last week, the NDRC said in a statement that on-grid tariffs of CNY0.51, CNY0.54, CNY0.58 and CNY0.61 a kilowatt-hour will be set as benchmarks for wind projects across the nation. The rates are in line with tariffs that the NDRC have approved in the past.
In the solar sector, the Ministry of Finance offers subsidies for half the total construction costs of an on-grid solar plant, and up to 70% for off-grid installations.
China is also considering a system of guaranteed minimum tariffs for solar power to be supplied to power grids. Currently, solar power tariffs are set on a case-by-case basis, leading to uncertainty on the part of investors.
Zhang also dismissed a study published this week by a research institute under the Ministry of Finance, which said China would likely level a carbon tax in 2012 or 2013.
"China has many independent research organizations and independent researchers, who regularly give their own views on the economy," he said.
Asked about a recent statement from China's State Council, or cabinet, which warned of overcapacity in the wind power equipment sector, Zhang stressed that Beijing's concern is over equipment specifically, and not the overall wind power sector.
"No one has said that China has too much wind power and needs less," he said.
Rather, the government's concern is that the Chinese wind power equipment sector is too fragmented between many small companies, putting it at a disadvantage to major international companies such as Vestas Wind Systems and General Electric Co., Zhang said.