26 Jul 2010 12:59

China sets power tariffs for biomass projects at $0.11 per kWh

Shanghai. July 26. INTERFAX-CHINA - China's National Development and Reform Commission (NDRC) announced on July 23 that it set power tariffs for all biomass projects at RMB 0.75 ($0.11) per kilowatt-hour (kWh), an average increase of RMB 0.07 ($0.01) per kWh.

According to the announcement, the cost difference between tariffs for biomass projects and traditional power projects will be covered by the RMB 4 ($0.59) per megawatt-hour (MWh) renewable energy fee currently levied on power consumers.

The NDRC noted that a 30-megawatt (MW) biomass power project is able to save 80,000 tons of coal annually, reduce carbon dioxide emissions by 180,000 and cut sulfur dioxide emissions by 1,000 tons. Moreover, such projects have the potential to bring revenue of between RMB 50 million ($7.35 million) and RMB 60 million ($8.82 million) to local farmers annually, the NDRC said.

Xie Feng, a consultant with Frost Sullivan, told Interfax that the tariff hike will likely increase the profitability of the biomass industry, which is currently facing a bottleneck in feedstock supplies created by the close proximity of projects to one another.

Xie mentioned that waste-to-energy (WTE) projects will not be subjected to the tariff increase.