China suddenly puts brakes on climate action, wind and solar subsidies

It’s almost like China’s climate action was just window dressing. It seems to be unraveling…

China’s National Carbon Trading Scheme was supposed to go into full operation later this month, but now it’s been cut back by two-thirds. Instead of “working” with 6,000 companies it will only involve 2,000. And only a week ago, the Chinese government suddenly axed solar and wind subsidies, with the cuts starting just six weeks from now. Oilprice calls it “a crushing blow for wind and solar”. There are even new demands for solar plants to sell at the same price as coal power. The Cruelty!

China produces three quarters of all the worlds supply of solar panels, having subsidized-the-heck out of the global industry and driven the US leaders out of production.

Judging by the Wall St Journal story — just in the last two months the paradigm has shifted from Environmental control to Economic priority:.

No new solar power plant subsidies. Just like that?

BEIJING, June 11 (Reuters) – China will no longer grant subsidies for new solar power stations, distributed solar projects by commercial users or onshore wind projects from the central government budget in 2021, the state planner said in a statement on Friday.

And now solar power can only sell at the same price as coal power? Really?

Electricity generated from the new projects will be sold at local benchmark coal-fired power prices or at market prices, the statement said.

Probably the central reason for the solar cuts is the extraordinary malinvestment of the solar subsidies, which amounted to a whopping $42 billion by mid last year. The subsidies are largely paid by electricity consumers who weren’t too happy*.

June 11, 2021, Oilprice

The country’s finance ministry had previously committed to granting 57 percent more subsidies to solar power projects this year, although it did slash subsidies for wind power.

Yet the reasons for the cut—and this year’s end of subsidies—were not exactly altruistic. China has amassed a massive debt pile in subsidies owed to wind and solar companies as a result of its previously generous support for new projects. The pile, according to a Bloomberg report from July last year, is worth about $42 billion.

Given the size of some of the cuts. the Wall St Journal headline is tame:

by Sha Hua in Hong Kong and Keith Zhai in Singapore, WSJ

China’s top economic planners have put the brakes on attempts by environmental officials to reduce carbon emissions…

China, which has done very well out of the Year-of-Covid, now wants to do even better: the-environment-be-damned?

… rather than giving priority to the reining in of fossil-fuel consumption now, officials at the economic planning office want to seize the momentum of the global post-pandemic recovery, even if it means elevated emissions in the short term, according to people familiar with the matter.

It was only in March when the Environmental ministry discovered steel companies were being naughty and slapped savage emissions cuts on them, but the economic ministry stepped in and has undone that slapping:

On May 31, at the behest of economic planners, China’s steel hub Tangshan ordered the loosening of emissions restrictions for its steelmakers—undoing a March directive that came after environmental ministry inspectors found the companies in violation of environmental regulations and instructed the companies to cut emissions by 30% to 50%.

But add this move to another move a week ago to suddenly chop wind and solar subsidies — effective by August 1?

* Consumer pays: just like the situation in Australia where renewable certificates were paid for through hidden costs buried in consumer bills — and largely paid for by people without solar panels.

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via JoNova

June 17, 2021 at 01:58PM

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