Response to recommendation no. 7410 of the 4th national people's congress
Your suggestions for a sustained push to lower the cost of electricity for business in general and to provide a strong support for the consolidation of a resilient economic growth base have been received. In consultation with the ministry of finance, the reply is as follows。
I. Proposals for increasing fiscal support for exemption or reduction of government funds and additional
In recent years, in accordance with the decisions taken by the central party and the state council, the ministry of finance, together with the relevant departments, has introduced a series of measures to clean up the electricity fund and additional measures, including the abolition of municipal utility supplements and special funds for the restructuring of industrial enterprises; a 25 per cent reduction in the criteria for the collection of the national fund for the construction of major hydraulic works in 2017 and 2018 and a 50 per cent reduction in 2019; and a 25 per cent reduction in the criteria for the collection of post-middle-sized water reservoir support funds. Government funds collected at electricity prices and additional levels continue to decline。
At present, the government fund for electricity prices and the additional funds include the national fund for the construction of major hydraulic works, the reservoir support fund for migrants, the renewable energy power price supplement fund and the agricultural network loan repayment fund. Among them, the national fund for the construction of major hydrological works has been used mainly for the construction of the north-south water project, the follow-up of the three gorges project, and the construction of major hydroelectric projects in the mid-west region; the watershed migrant support fund has been used mainly to provide a living allowance of $600 per person per year for 25 million large- and medium-sized reservoir farmers and to support small reservoir rural migrants in their productive lives, which plays an important role in supporting rural renewal. The surcharge of electricity for renewable energy is charged under the renewable energy act and is mainly used to subsidize the difference between the price of internet access for renewable energy projects and that of conventional energy access. The repayment of loans from the network is mainly related to the servicing of rural electricity grid upgrades in rural areas, especially in poor areas of the central and western regions. The above-mentioned governmental funds and their attachments are of great positive significance in addressing the major human problems in the country and supporting the development of public services. The proposals that you have put forward are of value to our work, and we will study them carefully in our future work。
Ii. In relation to the granting of electricity-price preferences to businesses in general
In recent years, as called for by the party centre, the state council's decision-making deployment and the report on the work of the government, the commission, together with the relevant departments, has continued to advance the implementation of the price of electricity reduction. In particular, the average price of electricity in business in general decreased by 10 per cent in 2018 and 2019, and the price of electricity in non-high-energy industries by 5 per cent in 2020, effectively reducing the cost of electricity for enterprises. Compared to 2014, large industries, ordinary business and industry prices are now reduced by more than 10 per cent and 30 per cent per kilowatt hour, reducing the cost of electricity to enterprises by more than $600 billion per year, and market agents are actually benefiting from the price-reducing policy dividend。
This year's report on the government's work proposes to allow all manufacturing enterprises to participate in market-based exchanges for electricity, to further clean up the use of electricity at unreasonable price increases and to continue to contribute to lowering the price of electricity in business in general. As a next step, we will follow up on the deployment requirements of the report of the government on the work of the government, step up the clean-up efforts to regulate the unreasonable increase in the price of electricity, and actively cooperate with the directorate-general of markets to carry out monitoring of the price behaviour of the non-grid supply chain to ensure that the national price policy dividend is fully channelled to the end-users. At the same time, market-based reforms in electricity prices continue to be intensified, prices for electricity are opened and sold in competitive areas that have not yet been priced by the market in an orderly manner, the construction of the electricity market is being accelerated, market rules are being improved, market-based transactions are being expanded to take full advantage of market mechanisms and the cost of electricity for enterprises is being further reduced。
Iii. On promoting market-based trade in wind, photovoltaic, etc
Since 2019, our national energy agency has issued a circular on the establishment of a sound renewable energy power cut-off mechanism (2019). A series of documents, such as no. 807, further develop a sound renewable energy electricity reduction mechanism, explore market-based ways of promoting renewable energy inclusion and achieve greater inter-provincial and regional optimization of renewable energy. In 2020, the basic rules for medium- and long-term trade in electricity were revised and issued. 889), integrates renewable energy into medium- and long-term electricity trading, suggesting a combination of “pouch price” and “pump price” to facilitate preferential power generation, including wind, photovoltaic and electricity generation, to participate in market transactions. Recently, we issued the circular on new energy access prices policy 2021 (2021] (no. 833) it is clear that new projects can voluntarily generate feed-in tariffs through participation in market-based transactions to better reflect the green price value of photovoltaic and wind power. Next, we will continue to promote wind and photovoltaic power participation in electricity market transactions, taking full advantage of market mechanisms and promoting the sustained and high-quality development of new energy industries。
Thank you for your interest in and support for development reform efforts。
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National development and reform commission
2 september 2021
