The Renewable Energy Law of the People's Republic of China

The Renewable Energy Law of the People's Republic of China

Approved by the Standing Committee of the National People's Congress (NPC) of the People's Republic of China in the 14th Session on February 28, 2005

Table of Contents

Chapter 1 General

Chapter 2 Resource Survey and Development Plan

Chapter 3 Industry Guidance and Technology Support

Chapter 4 Promotion and Application

Chapter 5 Price Management and Fee Sharing

Chapter 6 Economic Incentives and Supervisory Measures

Chapter 7 Legal Responsibilities

Chapter 8 Miscellaneous

Chapter 1. General

Article 1-In order to promote the development and utilization of renewable energy, improve the energy structure, diversify energy supplies, safeguard energy security, protect the environment, and realize the sustainable development of the economy and society, this Law is hereby prepared.

Article 2-Renewable energy in this law refers to non-fossil energy of wind energy, solar energy, water energy, biomass energy, geothermal energy, and ocean energy, etc.

Application of this Law in hydropower shall be regulated by energy authorities of the State Council and approved by the State Council.

This Law does not apply to the direct burning of straw, firewood and dejecta, etc. on low-efficiency stove.

Article 3-This Law applies to territory and other sea area of the People's Republic of China.

Article 4-The Government lists the development of utilization of renewable energy as the preferential area for energy development and promotes the construction and development of the renewable energy market by establishing total volume for the development of renewable energy and taking corresponding measures.

The Government encourages economic entities of all ownerships to participate in the development and utilization of renewable energy and protects legal rights and interests of the developers and users of renewable energy on the basis of law.

Article 5-Energy authorities of the State Council implement management for the development and utilization of renewable energy at the national level. Relevant departments of the State Council are responsible for the management of relevant development and utilization of renewable energy within their authorities.

Energy authorities of local people's governments above the county level are responsible for the management of the development and utilization of renewable energy within their own jurisdiction. Relevant departments of local people's governments above the county level are responsible for the management of relevant development and utilization of renewable energy within their authorities.

Chapter 2 Resource Survey and Development Plan

Article 6-Energy authorities of the State Council are responsible for organizing and coordinating national surveys and management of renewable energy resources, and work with related departments to establish technical regulations for resource surveys.

Relevant departments of the State Council, within their respective authorities, are responsible for related renewable energy resource surveys. The survey results will be summarized by the energy authorities in the State Council.

The result of the survey of renewable energy shall be released to the public, with the exception of confidential contents as stipulated by the Government.

Article 7-Energy authorities of the State Council sets middle and long-term target of the total volume for the development and utilization of renewable energy at the national level, which shall be implemented and released to the pubic after being approved by the State Council.

Energy authorities of the State Council shall, on the basis of the target of total volume in the previous paragraph, as well as the economic development and actual situation of renewable energy resources of all provinces, autonomous regions and municipalities, cooperate with people's governments of provinces, autonomous regions and municipalities in establishing middle and long-term target and release it to the public.

Article 8-Energy authorities of the State Council shall, on the basis of the middle and long-term total volume target of renewable energy throughout the country, prepare national renewable energy development and utilization plan, which is to be implemented after being approved by the State Council.

Energy authorities of the people's governments at the level of province, autonomous region and municipality shall, on the basis of the middle and long-term target for the development and utilization of renewable energy, cooperate with relevant authorities of the people's governments at their own level in preparing national renewable energy development and utilization plan for their own administrative regions, which shall be implemented after being approved by people's governments at their own level.

The approved plan shall be released to the public, with the exception of confidential content as stipulated by the government.

In case that the approved plan needs to be modified, approval of the original approving authorities shall be obtained.

Article 9-In preparing the plan for the development and utilization of renewable energy, opinions of relevant units, experts and the public shall be solicited and the scientific reasoning shall be done.

Chapter 3 Industry Guidance and Technology Support

Article 10-Energy authorities in the State Council shall, in accordance with the national renewable energy development plan, prepare and promulgate development guidance catalogs for renewable energy industries.

Article 11-Standardization authorities of the State Council shall set and publicize technical standard for renewable energy electric power and the technical standards for relevant renewable technology and products for which technical requirements need to be standardized at the national level.

For those technical requirements not dealt with in the national standard in the previous paragraph, relevant authorities of the State Council may establish relevant industrial standard, which shall be reported to the standardization authorities of the State Council for filing.

Article 12-The government lists scientific and technical research in the development and utilization of, and the industrialized development of, renewable energy, as the preferential area for hi-tech development and hi-tech industrial development in the national program, and allocates funding for the scientific and technical research, application demonstration and industrialized development of the development and utilization of renewable energy so as to promote technical advancement in the development and utilization of renewable energy, reduce the production cost of renewable energy products and improve the quality of products.

Education authorities of the State Council shall incorporate the knowledge and technology on renewable energy into general and occupational education curricula.

Chapter 4 Promotion and Application

Article 13-The Government encourages and supports various types of grid-connected renewable power generation.

For the construction of renewable energy power generation projects, administrative permits shall be obtained or filing shall be made in accordance with the law and regulations of the State Council.

In the construction of renewable power generation projects, if there is more than one applicant for project license, the licensee shall be determined through a tender.

Article 14-Grid enterprises shall enter into grid connection agreement with renewable power generation enterprises that have legally obtained administrative license or for which filing has been made, and buy the grid-connected power produced with renewable energy within the coverage of their power grid, and provide grid-connection service for the generation of power with renewable energy.

Article 15-The Government supports the construction of independent renewable power systems in areas not covered by the power grid to provide power service for local production and living.

Article 16-The Government encourages clean and efficient development and utilization of biological fuel and encourages the development of energy crops.

If the gas and heat produced with biological resources conform to urban fuel gas pipeline networks and heat pipeline networks, enterprises operating gas pipeline networks and heat pipeline networks shall accept them into the networks.

The Government encourages the production and utilization of biological liquid fuel. Gas-selling enterprises shall, on the basis of the regulations of energy authorities of the State Council or people's government at the provincial level, include biological liquid fuel conforming to the national standard into its fuel-selling system.

Article 17-The Government encourages workplaces and individuals in the installation and use of solar energy utilization systems of solar energy water-heating system, solar energy heating and cooling system and solar photovoltaic system, etc.

Construction authorities of the State Council shall cooperate with relevant authorities of the State Council in establishing technical economic policies and technical standards with regard to the combination of solar energy utilization system and construction.

Real estate development enterprises shall, on the basis of the technical standards in the previous paragraph, provide necessary conditions for the utilization of solar energy in the design and construction of buildings.

For buildings already built, residents may, on the condition that its quality and safety is not affected, install solar energy utilization system that conform to technical stdnards and product standards, unless agreement has been otherwise reached between relevant parties.

Article 18-The Government encourages and supports the development and utilization of renewable energy in rural areas.

Energy authorities of local people's governments above the county level shall, on the basis of local economic and social development, ecological protection and health need, etc., prepare renewable energy development plan for the rural area and promote biomass energy like the marsh gas, etc. conversion, household solar energy, small-scale wind energy and small-scale hydraulic energy, etc.

People's government above the county level shall provide financial support for the renewable energy utilization projects in the rural areas.

Chapter 5 Price Management and Fee Sharing

Article 19-Grid power price of renewable energy power generation projects shall be determined by the price authorities of the State Council in the principle of being beneficial to the development and utilization of renewable energy and being economic and reasonable, where timely adjustment shall be made on the basis of the development of technology for the development and utilization of renewable energy. The price for grid-connected power shall be publicized.

For the price of grid-connected power of renewable power generation projects determined through tender as stipulated in the 3rd paragraph of Article 13 hereof, the bid-winning price shall be implemented; however, such a price shall not exceed the level of grid-connected power of similar renewable power generation projects.

Article 20-The excess between the expenses that power grid enterprises purchase renewable power on the basis of the price determined in Article 19 hereof and the expenses incurred in the purchase of average power price generated with conventional energy shall be shared in the selling price. Price authorities of the State Council shall prepare specific methods.

Article 21-Grid connection expenses paid by grid enterprises for the purchase of renewable power and other reasonable expenses may be included into the grid enterprise power transmission cost and retrieved from the selling price.

Article 22-For the selling price of power generated from independent renewable energy power system invested or subsidized by the Government, classified selling price of the same area shall be adopted, and the excess between its reasonable operation, management expenses and the selling price shall be shared on the basis of the method as specified in Article 20 hereof.

Article 23-The price of renewable heat and natural gas that enters the urban pipeline shall be determined on the basis of price management authorities in the principle of being beneficial to the development and utilization of renewable energy and being economic and reasonable.

Chapter 6 Economic Incentives and supervisory measures

Article 24-The Government budget establishes renewable energy development fund to support the following:

1. Scientific and technological research, standard establishment and pilot project for the development and utilization of renewable energy;

2. Construction of renewable energy projects for domestic use in rural and pasturing areas;

3. Construction of independent renewable power systems in remote areas and islands;

4. Surveys, assessments of renewable energy resources, and the construction of relevant information systems;

5. Localized production of the equipment for the development and utilization of renewable energy.

Article 25-Financial institutions may offer preferential loan with financial interest subsidy to renewable energy development and utilization projects that are listed in the national renewable energy industrial development guidance catalogue and conform to the conditions for granting loans.

Article 26-The Government grants tax benefits to projects listed in the renewable energy industrial development guidance catalogue, and specific methods are to be prepared by the State Council.

Article 27-Power enterprises shall authentically and completely record and store relevant materials of renewable energy power generation, and shall accept the inspection and supervision of power supervisory institutions.

Power supervisory institutions shall do the inspection in accordance with stipulated procedures, and shall keep commercial secret and other secret for inspected units.

Chapter 7 Legal Responsibilities

Article 28-If energy authorities of the State Council and the people's governments above the county level as well as other relevant authorities breach this Law and have one of the following, people's government of their own level or relevant authorities of the superior people's governments may order them to make correction, and impose administrative penalty for competent personnel that are liable and other personnel directly liable; in case that such breaches constitute crime, criminal liabilities shall be legally pursued.

1. Failure to make administrative licensing decision in accordance with law;

2. Failure to make an investigation when illegal activities are dicovered;

3. Other acts of not legally performing supervision and management responsibilities.

Article 29-If the power grid enterprises breach Article 14 hereof and fail to purchase renewable power in full, which results in economic loss to the renewable power generation enterprises, such power grid enterprises shall be liable for compensation, and the national power supervisory institutions shall order them to make correction within a stipulated period of time; in case of refusal to make correction, a fine of less than the economic loss of the renewable power generation enterprises shall be imposed.

Article 30-In case that enterprises of natural gas pipeline network and heat pipeline network breach paragraph 2 of Article 16 hereof and do not permit the connection of natural gas and heat that conform to the grid connection technical standard into the network, which results in economic loss to the gas and heat production enterprises, relevant enterprises shall be liable for compensation, and energy authorities of the people's government at the provincial level shall order them to make correction within a stipulated period of time; in case of refusal to make correction, a fine of less than said economic loss shall be imposed against them.

Article 31-If gas-selling enterprises breach paragraph 3 of Article 16 hereof and fail to include biological liquid fuel that conforms to the national standard into its fuel-selling system, which results in economic loss to the biological liquid fuel production enterprises, relevant enterprises shall be liable for compensation, and energy authorities of the State Council or people's government at the provincial level shall order them to make correction within a stipulated period of time; in case of refusal to make correction, a fine of less than said economic loss shall be imposed against them.

Chapter 8 Miscellaneous

Article 32-Terms used herein shall have the following meanings:

1. Biomass energy: means energy converted from natural plants, rejecta as well as urban and rural organic waste.

2. Renewable energy independent power system: means independent renewable power system not connected to the power grid.

3. Energy crop: means herbage and wood plants specially planted and used as raw materials of energy.

4. Biological liquid fuels: means methanol, ethanol, bio-diesel and other liquid fuels derived from biomass resources.

Article 33-This Law shall become effective on Jan 1st, 2006.