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China has backtracked on policies implemented to increase solar power, announcing it would not approve any wind and solar power projects unless they can compete with coal power plants strictly on the basis of price.
Under a plan announced in May 2018, the Chinese government had granted large solar power projects a per-kilowatt-hour (kWh) subsidy. The government is cancelling that subsidy for new projects immediately.
In addition to cost considerations, the government said the rapid expansion of wind and solar power had created logjams on the electric power grid, resulting in wasted electricity due to lack of capacity to transmit and distribute the rapidly fluctuating power. In 2017, capacity issues resulted in 12 percent of wind generation and 6 percent of solar electricity generated being wasted.
According to plans announced by China’s National Development and Reform Commission, no new solar and wind projects would be approved through the end of 2020. Any projects proposed beginning in 2021 will have to show they can beat the price of coal power and demonstrate the electric power grid can handle their output. The national government will allow local governments to continue to offer their own subsidies for wind and solar projects if they wish, as long as any projects they support meet the second condition. The national government also announced it would no longer provide support for local solar or wind manufacturing facilities.