China to phase out solar and wind subsidies by 2020

China is set to dramatically reduce its subsidy support for solar and wind power, previews of the nation’s newest five-year energy plan (2016-2020) show.

Beijing plans to phase out subsidies for solar and wind technology makers within the next six years, with an unnamed government official quoted in several media outlets as saying manufacturers should "actively improve technology to cut costs in order to gain market share, instead of depending on government subsidies”.  

Under the new plan, China’s tariffs for solar power will be reduced by 50 per cent by 2020, falling from the current RMB0.9 ($0.15)/kWh to RMB0.6/kWh. Wind power tariffs will also be cut sharply, falling to RMB0.4/kWh from the current RMB0.6/kWh.

At the same time, the new plan would increase China’s solar capacity target to 100 GW by 2020 and its wind capacity target to 200 GW. Commentators have warned that the aggressive new targets coupled with the planned reduction in state support could result in a building boom of economically unviable solar and wind power plants.

Under the new plan, China also aims to establish a nuclear development belt in the nation’s eastern region and an offshore energy exploration belt along the coast. According to the new plan, China’s nuclear capacity is planned to reach 58 GW by 2020, with 30 GW currently in the pipeline.

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