China's National Energy Administration, under the National Development and Reform Commission, has started investigating practices of local governments' improper market intervention moves, such as enforcing investments in wind power, photovoltaic energy, and pumped storage development projects this year.
Some local governments or departments required investors to make additional investments in supporting areas of new energy and pumped storage projects, including in wind turbines, towers, polysilicon, silicon wafers, battery cells, and battery modules fields, according to a plan the NEA released on Oct. 27. They also impeded and discriminated projects and investment entities that have not pledge investments in supporting areas, the plan showed.
Every provincial energy regulator is responsible for rectifying such moves, the NEA said. Local governments must make corrections and form long-term mechanisms, with ratifications to end on Nov. 30, it added.
Provincial-level regions, including Hebei, Xinjiang Uygur Autonomous Region, Fujian, Hubei, Guizhou, and Shanxi, have issued special rectification work plans that focus on enforced investments in the development of wind power, photovoltaic and other projects.
Resources for new energy sectors such as mining ore became a premium for many local governments in recent years with the rapid development of the wind power and PV energy sectors, people in charge at several new energy firms told Yicai. Some local governments proposed to allow local companies to become shareholders in projects by non-local developers and required them to make additional investments in other local sectors, they noted.
Some regions, especially less economically developed ones, exchange local resources for industrial development, said Liu Manping, a senior economist at the NDRC's price monitoring center. For instance, a county government required a PV project developer to also build a farm costing CNY30 million (USD4.2 million) for 10,000 livestock, Liu added.
In August, China's government issued a document to ban similar enforced additional investments in solar power generation projects.
（Picture: Veer）
