China Legislature Passes Renewable Energy Bill
    By Hu Cong
    China Daily

    Tuesday 01 March 2005

    Non-fossil energy sources, including wind, solar power and thermal power, will make up a bigger share of China's energy resources under a new bill passed yesterday encouraging use of renewable energy.

    Members of the Standing Committee of the National People's Congress (NPC) approved the Law on Renewable Sources, which upholds renewable energy as a priority in China's energy strategy.

    "The development and use of renewable energy has special importance because China is a developing country with severe energy shortages," Standing Committee member Li Congjun said at a discussion on Saturday.

    The new law, effective next year, provides a host of practices to ensure that renewable energy can be produced, marketed and used.

    It orders power grid operators to purchase "in full amounts" resources from registered renewable energy producers within their domains. It also encourages oil distribution companies to sell biological liquid fuel on the sidelines.

    According to the law, power grid operators should buy renewable-source-generated power at directed prices calculated by the government. The extra costs incurred by this will be shared throughout the overall power network.

    The law also offers financial incentives, such as a national fund to foster renewable energy development, and discounted lending and tax preferences for renewable energy projects.

    "It requires huge inputs of money and talent to develop renewable energy, especially at the budding stage, so the incentives from public coffers are very necessary," said Chang Jingwen, a law researcher with the Chinese Academy of Social Sciences in Beijing.

    It usually takes three reviews before an act goes to a vote. But this one was passed after the second round, with senior legislators acknowledging the vital need to get the nation on a sustainable energy fast track amid worries about the country's worsening pollution problems, chronic energy shortages and increasing reliance on imported energy sources.

    Official data show China's per capita possession of oil reserves is about 10 per cent compared to the world average.

    Power is still unavailable in 20,000 or so remote villages housing about 30 million people.

    About 60 per cent of China's 768 million rural residents still use open fires to cook on or heat their homes, creating serious pollution and health problems, while damaging vegetation.