China further incentivises coal plant owners to reduce emissions

A week after pledging its intention to substantially reduce emissions from power plants, China’s top economic planner has stated that the country will raise power prices paid to coal-fired power plants that comply with the government's coal efficiency standards.

At COP21 last week in Paris the Chinese announced that they would reduce major pollutants in the power sector by 60 per cent and annual carbon dioxide emissions from coal-fired power plants by 180 million tonnes.
Chinese air pollution
The new measure is in line with that target as China battles to cut the air pollution that has plagued its cities.

Coal-fired power accounts for three quarters of China's total generation capacity and despite of taken to curb its associated emissions, the world's biggest consumer of energy has struggled to enforce its rules on cash-strapped generators amid slowing economic growth.

Plants that open after Jan. 1 and meet the government's environmental requirements will get an additional 0.005 yuan per kilowatt hour on top of their basic grid tariff, said the National Development and Reform Commission (NDRC) in an official statement.

Those already in operation will get an extra 0.01 yuan per kilowatt hour, which would equate to about 42 million yuan ($6.5 million) if all thermal power output last year had been produced at plants meeting the coal efficiency standards.

The higher tariffs will take effect in January and last until the end of 2017, when the government will reassess the rate, the NDRC said.

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