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National Relevant policies in Agriculture, Forestry and Biomass Power Generation

Biomass is both a new and a renewable energy resource.  The state’s specific policy in new energy resources, renewable energy resources and biomass are important factors to ensure the stable development of the agriculture, forest and biomass power industry. The state’s planning and policy for strategic emerging industries and the new energy industry are outlined below.

In May 2012, the State Council executive meeting discussed and adopted "the 12th five-year plan for national strategic emerging industry development".  This plan created direction and the major tasks for the seven strategic and emerging industries such as energy saving and environmental protection, new information technology, biology, high-end equipment manufacturing, new energy, new material, new energy cars and so on.

“The 12th five-year plan for renewable energy” proposes the goal of biomass energy production to reach an installed biomass power-generating capacity of 13 million kilowatts by 2015 with an increase to 30 million kilowatts by 2020.  It has increased 1.36 times and 4.45 times respectively than the 5.5 million kilowatts available at the end of 2010 and will reach 8 million kilowatts by the end of the “12th five-year plan”.

The Ministry of Finance has set up a special fund for renewable energy development, and has also stated “The interim measures for renewable energy development funds"《可再生能源发展专项资金暂行管理办法》. But, the measures have failed to specify how to report enterprise funds and how to determine the extent of preferential policies. What’s more, the measures take wind power, solar and ocean energy as key subsidy targets, to the exclusion of biomass power which also has great ecological and social benefits.

"National Forestry Biomass Energy Development Plan (2011 - 2020)", Ministry of Finance, Ministry of Agriculture and National Energy Administration and other departments are working together to promote green energy development counties and plan to build 200 green energy development counties during "the 12th five-year plan", including the first batch of 108 counties.  The green energy demonstation county subsidy is one example with direct subsidies from the central government for the development of biomass energy will reach 4.75 billion yuan.  Qin Shiping, researcher from Renewable Energy Research Center of National Development and Reform Commission Energy Research Institute, states that this "generous “financial support will undoubtedly provide a strong incentive for biomass energy industry.

In July 2012, National Energy Administration issued "The 12th Five-year Plan for Biomass Energy Development" in the name of New Energy [2012] No. 216 and pointed out that, by 2015, China will have establish a relatively integrated biomass industrial system and will be able to initially realize large-scale commercial use in electricity, heating, household energy consumption in rural areas. It is estimated that in 2015 the annual use of agricultural and forestry residues will reach 75 million tons, the annual use of various energy crops 25 million tons, the annual processing of animal manure 560 million tons, municipal solid waste 64 million tons and urban sewage treatment plant will dispose of 15 million tons of sludge and waste oil 900,000 tons. This will provide a substitute for 50 million tons of standard coal energy production and will reduce 95 million tons of carbon dioxide emissions and 650,000 tons of sulfur dioxide accordingly.

The price of biomass electricity has long been a common concern for the entire industry. In order to promote a more healthy development of the  biomass energy industry and further complete policies of biomass electricity price structure, the National Development and Reform Commission(NDRC) issued the price in the document of "Notice on Improving Agriculture and Forestry Biomass Power Price Policy," [2010] No. 1579, and raised the following related issues:

1. The first issue is to implement a uniform price policy on agricultural and forestry biomass power generation projects. Those new agricultural and forestry biomass power generation projects that failed to determine the investors via bidding have to implement the uniform electricity price of 0.75 yuan per KWH (including tax and the same below). Those projects that have determined the investors via bidding have to implement the bidding price, but it should not be higher than the uniform price for agriculture and forestry biomass power.

2. On one hand, if the price of those agricultural and forestry biomass power generation projects (except for bidding projects) is lower than the uniform price, they should raise to 0.75 yuan per KWH. On the other hand, if the price of those biomass electricity generation projects approved by the State is higher than the above criteria, they are allowed to keep the original price standard.

3. The price of agricultural and forestry biomass power within the local price of the desulfurized coal-fired generating unit is paid by the local provincial grid; and the money above the local price standard is paid by a national renewable energy extra price. If the local price of desulfurized coal-fired generating unit changes, the price paid by the local provincial grid should be adjusted accordingly.

4. Agriculture and forestry biomass power generation enterprises and power grid enterprises should truly and completely record and preserve the data of the grid-connected quantity of trading electricity, the price and the amount of subsidies.  It should also accept supervision and inspection of the departments concerned. Price departments at all levels should strengthen the supervision and management of the implementation of the agricultural and forestry biomass price and the settlement of price subsidies. All these measures will ensure the implementation of the price policy.

Inner Mongolia boasts tremendous potential in the development of biomass power generation industry. In order to encourage the active development of biomass power generation, its local governments pointed out in the "People's Government Guidance on Industry Economy and Information Technology in Inner Mongolia Autonomous Region " that Inner Mongolia has focused on the development of strategic emerging enterprises in five aspects including the development of a new energy. It also mentioned that Inner Mongolia will give full play to its advantages in wind, solar and biomass resources, and build a national green energy base.

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