Photovoltaic "Road" speculation of "crime and punishment

On the 12th and 13th of October, the National Energy Administration website sent two notifications in a row, namely “Notice on Launching Special Supervision and Management of Investment and Development Order for New Power Projects” and “Notice on Further Strengthening the Construction and Operation Management of Photovoltaic Power Plants”. Pointed out that in the process of investing in power projects such as photovoltaic power plants, there are problems in some areas and projects where policies have not yet been fully implemented, supporting measures are missing, and the filing (approval) procedures are not transparent, and even speculative behaviors of new power project investment development have arisen. The construction cost has disrupted the investment and development order of new power projects.

To this end, the National Energy Administration has decided to carry out special supervision over the investment and development order of newly-built power projects nationwide. One of the focuses of supervision and control is the record, approval and investment development of photovoltaic power generation, especially the changes in equity before the power supply project is put into production. The National Energy Administration clearly requested that the investment and development order of newly-built power projects be further regulated, and that speculation before the new power projects are put into production should be resolutely stopped. A heavy supervision over the speculative behavior of photovoltaic power plant projects kicked off.

Is anyone really reselling the "Road"?

The so-called "roads" refer to the approval documents issued by the relevant departments to carry out the preliminary work of the project. Obtaining the approval means that the investment project has been included in the national special plan and has obtained the “qualification qualification”. As a precondition, an investment project can only be started after supporting roads such as environmental assessment, soil and water conservation, geological disasters, land pre-trial, and grid access.

After the National Energy Administration had decentralized its administration and decentralized a number of administrative examinations and approvals, the approval authority for photovoltaic power plants had also been decentralized to various places. In some places, there was a problem of opaque procedures for recording (approving) PV power plant projects. To this end, the National Energy Administration requires that provincial energy authorities should, in accordance with the "Interim Measures for the Management of Photovoltaic Power Plant Projects," and other requirements, clarify the conditions and procedures for the recording of photovoltaic power plant projects, and minimize the prerequisites for project filing.

Is the "Road" reselling really happen? How serious is it? After two notifications issued by the National Energy Administration, as a major province of photovoltaic power generation, the Xinjiang Energy Regulatory Office, which was stationed in Xinjiang by the National Energy Administration, immediately carried out verification of the “road” phenomenon of photovoltaic power generation reselling within its jurisdiction.

Xinjiang Energy Regulatory Office interviewed 4 large-scale and representative private enterprises respectively (Xinjiang Haitianda Investment Co., Ltd., TBEA Xinjiang New Energy Co., Ltd., Zhenfa Group Xinjiang New Energy Company, Shunfeng Optoelectronics Investment Co., Ltd. The Xinjiang branch of the company) and two state-owned enterprises (China Three Gorges New Energy Corporation Xinjiang Branch and Guangdong Hydropower Xinjiang New Energy Co., Ltd.), the above six companies have put into production the total capacity of photovoltaic power stations in Xinjiang 100,000 kilowatts (4 private enterprises accounted for 92 %), which accounted for 33% of the total capacity of photovoltaic installations in Xinjiang Power Grid, and the total capacity under construction was 520,000 kilowatts (94% for 4 private enterprises).

As a result of the verification, the phenomenon of “selling road strips” for photovoltaic power generation in the Xinjiang region does exist. The transfer of approved projects on the grounds of insufficient funds, tight deadlines for construction, and weak technical forces will result in fees ranging from 0.3 to 0.6 yuan per watt depending on the light resources of the region where the project is located. Some of the company's feedback was implied and proposed during 2012–2013. There are many intentions to buy and sell power stations.

How to rectify the behavior of reselling "Road"?

The National Energy Administration has explicitly requested that “forbidden trading of project filing documents and related rights and interests, photovoltaic power station projects that have gone through the filing procedure, and if there is a major change in the investment entity, it should be re-filed”. Can be described as photovoltaic power plant "road" reselling behavior a blow.

Regarding the phenomenon of "roadside stripping" of PV power plants, Jiang Shaojun, a full-time consultant of the China Electric Power Development Association, told reporters that there are many chaos in the road. Many of them are trying to avoid taxation and avoid supervision. Jiang Shaojun suggested that since the “Road” is a recognition of the preparatory work of the project, if the preparatory work is valued, the “Road” can be put on the market for a paid transfer without increasing the on-grid tariff. This can give birth to a New industry. But the premise is that the transaction should be transparent, competitive bidding, compliance, and conduct in the property market.

Regarding the possibility of cancellation of the “Road”, Jiang Shaojun believes that the “Road” at this stage is a necessary stage for the establishment of the project. The procedure itself is not guilty. It is only a matter of how the organization that controls the procedure performs its duties. Cancelling the "Road", or expanding it, cancels the approval and requires a series of institutional conditions.

"For example, photovoltaics, cancellation of approval, free market entry, how to coordinate the relationship with other types of power generation, and how to coordinate the relationship with the power grid are unknown." Jiang Shaojun told reporters.

At present, China is strongly encouraging the development of distributed photovoltaics, and distributed photovoltaics do not require “roads.” Will the development of distributed development bring about a huge impact on the phenomenon of reselling “roads”? In this regard, Jiang Shaojun believes that when distributed photovoltaics reach a certain scale, they will have an impact on existing markets, but the overall release of photovoltaic projects will have to begin with planning.

The National Energy Administration also requires strengthening the planning and management of photovoltaic power plants. In particular, provincial energy authorities are required to formulate plans for the construction of photovoltaic power stations in the region and annual implementation plans in accordance with the requirements of the national photovoltaic power station construction plan, combined with the regional electricity market and grid planning, construction, and operation, etc., which should include Development goals, main tasks, regional layout, key projects, implementation steps, supporting power grid construction, and safeguard measures.