China’s National Energy Administration (NEA) has announced that the deadline for the first batch of CSP demo projects can be extended to 2020, but with an electricity price reduction mechanism.

On May 22, China’s NEA issued a notice on “Promoting the Construction of Solar Thermal Power Demonstration Projects”. The notice pointed out that the first batch of solar thermal power generation demonstration projects is the first large-scale demonstration program for solar thermal power generation in China.

It is an important measure to promote the progress of solar thermal power generation technologies and the development of the industry. We shall reach a consensus to attach great importance to the construction of demonstration projects, take multiple measures to focus on building a project promotion mechanism and strengthen collaboration and taking multi-party actions to form a joint effort.

The notice clearly states that the first batch of demonstration projects which are completed and put into production by December 31, 2018, will adopt the benchmark on-grid price of RMB 1.15 per kilowatt-hour (inclusive of taxes). According to the actual conditions of the demonstration projects, the construction deadline of the first batch of demonstration projects can be extended to December 31, 2020; however, at the same time, an electricity price reduction mechanism for overdue projects will be established.

The CSP demo projects can make appropriate adjustments for the construction, but should meet five requirements. In particular, as for changes to the shareholding structure, the absolute controlling shareholder shall remain unchanged.

The notice also stated that those who had failed to submit construction commitments on time (by the end of February, 2018) will no longer enjoy the policies for demonstration projects, which means there are now 16 of the original 20 demo projects remaining on the list.

In addition, the notice also requires the State Grid Corporation of China to ensure that the power generated by these CSP demonstration projects will be fully consumed.

[The full text is translated by China National Solar Thermal Alliance as follows:]

Notice of the National Energy Administration on Promoting the Construction of Solar Thermal Power Demonstration Projects

To the Development and Reform Commissions (Energy Bureaus) and Price Bureaus of Qinghai Province, Gansu Province, Hebei Province, Inner Mongolia Autonomous Region and Xinjiang Autonomous Region, State Grid Corporation of China and various enterprises investing in solar thermal power generation demonstration projects:

In September 2016, the National Energy Administration printed and issued the Notice on the Construction of Solar Thermal Power Generation Demonstration Projects (GNXN [2016] No. 223, hereinafter referred to as “the Notice”) and initiated the construction of the first batch of 20 solar thermal power generation demonstration projects.

In order to implement the relevant requirements for the construction of demonstration projects, accelerate the construction of demonstration projects and ensure the effectiveness of the implementation, through negotiating with the Price Department and the Basic Department of National Development and Reform Commission, the relevant matters are hereby notified as follows.

I. Reaching a consensus to attach great importance to the construction of demonstration projects

The first batch of solar thermal power generation demonstration projects is the first large-scale demonstration program for solar thermal power generation in China. It is an important measure to promote the progress of solar thermal power generation technologies and the development of the industry. The smooth construction and operation of the projects are of great significance to demonstrating and leading the development of the industry. Relevant provincial energy authorities and various enterprises investing in demonstration projects must attach great importance to the projects, highlight the goal-oriented approach, earnestly take ownership of their responsibilities, conscientiously do a good job in all aspects of demonstration projects, ensure that projects meeting construction conditions are completed and put into production as required, and give full play to their exemplary and leadership roles.

II. Taking multiple measures to focus on building a project promotion mechanism

(I) Establishing an electricity price reduction mechanism

The Notice of the National Development and Reform Commission on Solar Thermal Power Generation Benchmark On-grid Pricing Policies (FGJG [2016] No. 1881) made it clear that the first batch of demonstration projects which are completed and put into production by December 31, 2018, will adopt the benchmark on-grid price of RMB 1.15 per kilowatt-hour (inclusive of taxes). According to the actual conditions of the demonstration projects, the construction deadline of the first batch of demonstration projects can be extended to December 31, 2020; however, at the same time, an electricity price reduction mechanism for overdue projects will be established. The specific price level will otherwise be clearly stated by the Price Department of the National Development and Reform Commission.

(II) Establishing a construction content adjustment mechanism

In order to promote the development of the solar thermal power generation industry, owners of demonstration projects can make appropriate adjustments to the relevant content of the construction of demonstration projects without affecting the fairness and equity of the industry. The relevant adjustments should meet the following requirements: (1) as for changes to the shareholding structure, the absolute controlling shareholder shall remain unchanged; (2) the scope of construction site changes shall be the area within the boundary of the same county; (3) adjustments to the heat storage medium and technical parameters shall ensure the optimization of system performance; (4) the technical integrator may be changed upon an agreement reached among relevant enterprises through negotiation; (5) other content of the demonstration may not be adjusted in principle. Adjustments to the content of construction shall be reported by the enterprise to the provincial energy authority, which will organize technical support institutions to study, verify and perform relevant procedures to be completed by the end of June; the said provincial energy authority is required to report the response to the proposed adjustments to the demonstration content to the Bureau in a timely manner.

(III) Establishing a withdrawal mechanism for the projects

According to the Circular of the General Affairs Department of the National Energy Administration on the Construction of Solar Power Generation Demonstration Projects (hereinafter abbreviated as “the Circular”), for the demonstration projects listed in the Circular that are withdrawn voluntarily, the local provincial energy authority must coordinate the relevant aftermath; for the demonstration projects listed in the Circular that have failed to submit construction commitments on time, the demonstration qualification of the project will be cancelled and the policies for demonstration projects will no longer be enjoyed; for enterprises investing in demonstration projects that are listed in the Circular with commitments to continue construction, the planned start-up time and planned completion and commissioning time clarified in the Circular shall be kept, and the safety production responsibilities and project quality requirements shall be implemented, so as to ensure that the demonstration projects are completed and put into production. As for enterprises investing in projects that have failed to start production or put into operation according to the specified time limit, the enterprises will be reported or restricted to participate in the construction of follow-up solar thermal power generation demonstration projects based on the severity of circumstances.

III. Strengthening collaboration and taking multi-party actions to form a joint effort

(I) The Bureau will work closely with relevant parties, strictly comply with the provisions and relevant requirements in the Notice, supervise and guide the implementation of the demonstration projects, establish, improve and strengthen the implementation of the three working mechanisms of “reduction, adjustment, withdrawal” and a system of default punishment, in order to ensure the industry demonstration and leading role of the first batch of projects.

(II) The provincial energy authority of the place where each demonstration project is located shall promptly carry out project construction promotion work, while at the same time strengthening service guarantees and coordination. In particular, it shall do a good job in communicating and coordinating with the local governments and power grid companies to ensure the project construction progress as well as its quality and efficiency.

(III) State Grid Corporation of China shall timely carry out the construction of grid access projects based on the definite planned construction progress of each demonstration project in accordance with the requirements of the Notice. It shall also study the grid-connection operation plan after the demonstration project is put into operation in advance, and ensure that the power generated by demonstration projects is fully consumed.

Relevant CSP Conference：CSP Focus MENA 2018（June 27-28,Marrakeck Morocco）