China’s top legislature has adopted an amendment to the renewable energy law mandating electricity grid companies to buy all the power produced by renewable energy generators.

The amendment says the State Council energy department and the state power regulatory agency should supervise the purchases.

The amendment, approved by lawmakers after it was heard the second time at a five-day meeting of the National People’s Congress (NPC) Standing Committee, aims to support the country’s fledgling renewable energy sector.

It says the State Council energy department, in conjunction with the state power regulatory agency and the State Council finance departments, should “determine the proportion of renewable energy power generation to the overall generating capacity for a certain period”. Enterprises refusing to buy power produced by renewable energy generators will have to pay a fine equivalent to double the amount the economic loss sustained by the renewable energy company, it says.

Renewable energy includes non-fossil ones such as wind and solar power, hydropower, biomass, geothermal and ocean energy. Still, two-thirds of China’s energy supply is fuelled by coal, and the country has become one of the largest greenhouse gas emitters.

The law, which took effect in January 2006, was aimed at “optimising the country’s energy structure and safeguarding energy security”. It covered subsidies, pricing management and supervision measures.

“The legislation on improving the consumption of clean energy contributes to the global fight on climate change,” said Wang Zhongying, director of the renewable energy development centre of the Energy Research Institute under the National Development and Reform Commission.

A national plan on renewable energy development issued in 2007 set a target to increase renewable resources to supply 15 per cent of its total energy consumption by 2020, to reduce greenhouse gas emissions and promote sustainable economic growth.

Statistics show renewable resources supplied 9 per cent of China’s total energy consumption last year, an equivalent of reducing 600 million tonnes of carbon dioxide.

Last month, the State Council announced that China was going to reduce the intensity of carbon dioxide emissions per unit of GDP in 2020 by 40 to 45 per cent compared with the level of 2005.

The law requires the government to set up a special fund to renewable energy research, finance rural clean energy projects, build independent power systems in remote areas and islands and build information networks to exploit renewable energy.

The fund will be managed by finance, energy and pricing sectors of the State Council.

Official statistics show that in 2008, China used more hydro and solar power than any other country and its use of wind power ranked fourth.

However, industry experts estimated that one third of the country’s wind-generated electricity could not be well transmitted to the grid.

Therefore, the amendment requires grid companies to “improve transmitting technologies and enhance grid capability to absorb more power produced by renewable energy generators.”

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