How Mandatory Renewable Power Consumption Mechanism play its role under the carbon neutrality target

In May 2019, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly issued the Notice on the Establishment and Improvement of Safeguard Mechanism for Renewable Power Consumption (CHN:关于建立健全可再生能源电力消纳保障机制的通知) (hereafter referred to as the Policy). It is a compulsory and binding policy, that every year the central government sets a quota for each province, which stipulates a certain percentage of electricity consumption is renewable energy. By combining the policy of mandatorily purchasing minimum full load hours of renewable power by TSOs on the power supply side, China has established a dual-track development mechanism for renewable power paralleling on the power supply side and the power consumption side.

After the renewable power such as wind power and solar PV are completely phased out national feed-in tariff􀊮 subsidies, the development of renewable power will transit from government planned and incentive-oriented mechanism to market-based operation with consumption-side responsibility. The Policy focuses to establish a long-term mechanism to ensure the realization of the 2025, 2030 and 2050 targets for share of non-fossil fuel and renewable energy in total energy consumption and power mix. The Policy will be a feasible operational measure for guiding the healthy development of the renewable energy industry, especially after wind power and solar PV has become subsidy-free available and fully de-subsided in the early phase of the 14th Five-Year period.