Editor’s Note:

Since its implementation in 2006, the "Renewable Energy Law of the People's Republic of China" (hereinafter referred to as the "Renewable Energy Law") has laid a legal foundation for the rapid development of renewable energy in China. Under the protection of the "Renewable Energy Law" and other legal frameworks, the construction of new type power systems and new energy systems has accelerated, with renewable energy maintaining a double-digit annual growth rate in recent years. By the end of 2024, China's wind power installed capacity had reached approximately 510 million kW, and photovoltaic installed capacity had reached approximately 840 million kW, with utilization rates maintaining over 95%. The global share of new installed capacity each year is over 40%, providing continuous power for global green development and contributing China's solutions and strength to the global green transformation. As the "dual carbon" goals progress steadily, the "Renewable Energy Law" urgently needs to adapt to new circumstances, requirements, and patterns, and its revision has become a key agenda. To this end, "China Energy News" has collaborated with the expert and working groups on the revision of the Renewable Energy Law from Tsinghua University to open a column discussing important topics, key systems, and corresponding legal provisions during the legislative process.

We welcome valuable opinions and suggestions from all sectors of society on the law revision.

Contact email: kzsnyfxd@163.com.

Since the implementation of the "Renewable Energy Law" in 2006, with supporting policies, a system of full guaranteed purchases, subsidy funds, and tax and fiscal exemptions has been formed, playing a significant role in promoting the development of renewable energy. According to data from the National Energy Administration, by the first half of 2024, the total installed capacity of renewable energy generation in China had exceeded 1.6 billion kW, accounting for more than half of the country's total power generation installed capacity, maintaining its position as the world leader. China's renewable energy industry has largely achieved autonomy, with significant production capacity and cost advantages globally. Under the guidance and support of the "Renewable Energy Law," renewable energy has entered a new stage of development and will continue to play an important role in maintaining national energy security and achieving the "dual carbon" goals.

However, during this rapid development, China’s renewable energy sector faces many challenges. The current electricity system operation mechanism and market structure are increasingly unable to meet the needs of large-scale renewable energy development. Under the full guaranteed purchase system, it has become more difficult to absorb renewable energy power, and the basic income after renewable energy enters the market is difficult to guarantee, with insufficient economic incentives for supply security and adjustment capabilities. The fluctuating and random nature of renewable energy generation increases the demand for power system transmission, distribution, supply security, and adjustment capabilities, highlighting issues such as mismatched construction schedules in planning. The development plans for renewable energy and related infrastructure are insufficiently coordinated, with land and sea supply bottlenecks and difficulties in land and sea use. Challenged by severe and complex external environments, the renewable energy industry is facing intense homogenous competition but lacking effective support from fiscal, tax, and industrial policies.

Currently, China is at a critical stage of energy transformation. The development situation of renewable energy, the physical form, and the operation mechanism of the power system have undergone significant changes compared to the initial legislation and the first amendment in 2009. Renewable energy has gradually shifted from supplementary energy to main energy. The electricity system’s dispatch methods have shifted from energy-saving generation and three-public dispatching to market-oriented dispatching methods. The power grid has transitioned from a provincial balance model to a cross-provincial and interregional large-scale interconnected AC-DC hybrid ultra-large power grid. Wind and solar power, once requiring subsidies, have now reached grid parity. Given this new development phase, it is timely to comprehensively improve the "Renewable Energy Law" through legal amendments. It is necessary to establish and reach a consensus on major issues, such as whether existing systems need to be retained, adjusted, or added, in the process of revision, ensuring that after the revision and publication of the "Renewable Energy Law," it can further boost confidence and motivation for the high-quality development of renewable energy.

According to the work plan for revising the "Renewable Energy Law," Tsinghua University has organized relevant institutions and experts to carry out a series of special research projects, achieving stage results in the following three areas. First, fully recognizing the importance and urgency of revising the "Renewable Energy Law" under the new situation of rapid renewable energy development, especially the need to urgently revise the full guaranteed purchase system to legally ensure the reasonable rights and interests of power generation enterprises after entering the electricity market, and promote the sustainable and healthy development of renewable energy. Second, fully recognizing the complexity and difficulty of legal amendments, which require adhering to a holistic view, strengthening system integration, handling multiple relationships such as breaking and establishing, price and quantity, short-term and long-term, overall and key aspects, policy guarantees and market absorption, and balancing the interests of various market participants. Third, fully recognizing the main objectives and key points to be achieved in legal amendments: the core goal of this revision is to support and promote the high-quality development of renewable energy, with the key focus on designing fair and reasonable mechanisms for assuming renewable energy absorption responsibilities and sharing system costs during the transition from policy-based absorption to market mechanisms, ensuring both the safe and stable operation of the power system and the protection of factors for renewable energy development and utilization.

To balance “market-guided allocation of renewable energy and adjustment capabilities” and “policy guarantees for its revenue,” and to clarify the rights, responsibilities, and obligations of the government, enterprises, and the public in the healthy development of renewable energy, further in-depth research is needed on the legal revision. Six main directions for research should be pursued: comparing mechanisms for ensuring renewable energy market entry, aligning the total development goals and related planning for renewable energy, adapting the power market mechanisms to support high-proportion large-scale renewable energy development, coordinating the development of renewable energy and the new type power system, ensuring land and sea factors for renewable energy use, and measures to support the renewable energy industry’s development.

The first is to comparing mechanisms for ensuring renewable energy market entry: With the increasing share of wind and solar energy, the difficulty of implementing the full guaranteed purchase system has grown. Many regions have already allowed renewable energy to partially enter the market, but the revenue after entering the market is uncertain. There is an urgent need to design a top-level system for renewable energy market entry, clarify the path to market access, revise the full guaranteed purchase system, and build a basic income guarantee mechanism for renewable energy in the market to stabilize development expectations.

The second is to align total development goals and planning for renewable energy: The medium- and long-term total development goals for renewable energy and their supporting development planning system are fundamental systems for driving renewable energy development in China. Thus, it is necessary to study the coordination mechanisms between local renewable energy planning and national planning, renewable energy and other energy development plans, and renewable energy and power grid and adjustment planning, to better promote resource optimization and energy supply security.

The third is to adapting the power market mechanisms to high-proportion large-scale renewable energy development: With the continuous increase in the total development goals for renewable energy, corresponding adjustments and innovations in power market mechanisms, including energy markets, ancillary services, and capacity compensation, are necessary to support large-scale renewable energy integration. It is of great significance to promote the integration of renewable energy through the market, to guide the optimal allocation of regulation and supply guarantee capacity with the market, and to utilize the market to streamline system costs. This approach plays a crucial role in achieving a clean and low-carbon transformation of the power system in an economically efficient manner, with renewable energy as a key focus, while ensuring safety and stability.

The fourth is to coordinate renewable energy with the new type power system: The current power system cannot meet the demands of large-scale renewable energy development. There is an urgent need to accelerate the construction of a new type power system, including transmission, distribution, and supply security capabilities. Studying the coordination mechanisms across the entire planning, construction, and operation processes between renewable energy power and other elements of the new power system helps guide and promote the sustainable and healthy development of renewable energy. It also ensures the reasonable distribution of benefits among the stakeholders in the source, grid, load, and storage sectors, ultimately optimizing the structure of the power system.

The fifth is to ensure land and sea factors for renewable energy use: Given the "dual carbon" targets and the green, low-carbon energy transition, future wind and solar installations should continue to grow rapidly. However, land and sea use constraints, as well as ecological and environmental concerns, should not be overlooked. In the future, research on land and sea use for renewable energy development will need to be intensified to release construction space rationally and support high-quality renewable energy development.

The sixth is to support the renewable energy industry’s development: China’s renewable energy industry faces challenges such as a severe external environment and intense market competition. Research on fiscal tax policies and industrial policies to support the renewable energy industry will help optimize the business environment, promote technological innovation, and foster international cooperation in the renewable energy sector.

Through deepened research in these six areas, we hope to clarify the internal logic of renewable energy development, build social consensus, and form a coordinated institutional effort to support the continuous and healthy development of renewable energy in China.

Edited by Zhang Xiliang and Kang Chongqing

Zhang Xiliang is the Director and Professor at the Energy and Environment Economics Research Institute of Tsinghua University, and the leader of the Renewable Energy Law Revision Expert Group at Tsinghua University;

Kang Chongqing is the Dean and Professor of the Department of Electrical Engineering and Applied Electronics at Tsinghua University, and the Deputy Leader of the Renewable Energy Law Revision Expert Group at Tsinghua University.

Reposted from Official WeChat Account of "China Energy News"