Accelerating Corporate Renewable Energy Engagement in China

Accelerating Corporate Renewable Energy Engagement in China

Accompanying the release of the report "Accelerating Corporate Renewable Energy Engagement in China," CRS reviewed the key findings and summarized the report’s recommendations. It assessed the current procurement options in the Chinese voluntary renewable energy market and presented how each option interacts with China’s renewable energy policies. It concluded with recommendations for how the market might be strengthened to boost voluntary procurement of renewable energy.

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Center for Resource Solutions

December 17, 2019
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    ACCELERATING CORPORATE RENEWABLE ENERGY ENGAGEMENT IN CHINA Rachael Terada DIRECTOR,

    TECHNICAL PROJECTS CENTER FOR RESOURCE SOLUTIONS D E C E M B E R 1 7 , 2 0 1 9 Orrin Cook DIRECTOR, INTERNATIONAL PROGRAMS CENTER FOR RESOURCE SOLUTIONS
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    PAGE 2 Nongovernmental Organization (NGO) creating policy and market solutions

    to advance sustainable energy since 1997. • Expert assistance • Renewable energy and climate policy • Renewable Energy Markets annual conference • Green-e® certification for suppliers and users of renewable energy and carbon offsets in the voluntary market About CRS © 2019 Center for Resource Solutions. All rights reserved.
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    1. Introduction • Background on China’s Electricity Sector • Voluntary

    Renewable Energy Markets 2. Voluntary Renewable Energy Activities and Purchasing Mechanisms in China • Existing Mechanisms • Emerging Mechanisms 3. Recommendations Outline PAGE 3 © 2019 Center for Resource Solutions. All rights reserved.
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    China’s Electricity Sector A SIMPLIFIED EXPLANATION OF A COMPLEX SECTOR.

    PAGE 4 © 2019 Center for Resource Solutions. All rights reserved.
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    • World’s largest electricity market • Highest annual emissions of

    CO2 e • Generation, transmission, distribution and retail managed by state-owned entities (State Grid and Southern Grid) • Electricity prices historically determined by government agencies, not market- driven • Generation hours are granted provincially, rather than economic dispatch model • Fossil fuel generation given priority in many locations China Electricity Sector Background PAGE 5 © 2019 Center for Resource Solutions. All rights reserved.
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    Renewable Energy in China PAGE 6 © 2019 Center for

    Resource Solutions. All rights reserved. • China has highest installed renewable energy capacity in the world • Curtailment of wind generation as high as 43% in certain provinces
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    Key Chinese Renewable Energy and Carbon Policies PAGE 7 ©

    2019 Center for Resource Solutions. All rights reserved. Feed-in Tariff Renewable Energy Quota System Emissions Trading Scheme (ETS)
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    Voluntary Renewable Energy Markets A COMPLEMENTARY TOOL ALONGSIDE OTHER ENERGY

    AND CARBON POLICIES PAGE 8 © 2019 Center for Resource Solutions. All rights reserved.
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    Global Corporate Sourcing of Renewable Energy PAGE 9 © 2019

    Center for Resource Solutions. All rights reserved. Source: IRENA, Corporate Sourcing of Renewables: Market and Industry Trends, 2018
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    Common Global Voluntary Market Procurement Options PAGE 10 © 2019

    Center for Resource Solutions. All rights reserved.
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    Key Criteria for Successful Voluntary Markets PAGE 11 © 2019

    Center for Resource Solutions. All rights reserved. 1. LEGAL BASIS FOR CLAIMS AND ATTRIBUTE TRANSFER 2. REGULATORY SURPLUS 3. ATTRACTIVE PRODUCT OPTIONS (PRICE AND/OR IMPACT)
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    Procurement Options in China EVOLVING MARKET. EMERGING OPPORTUNITIES. CLAIMS UNCERTAINTY.

    PAGE 12 © 2019 Center for Resource Solutions. All rights reserved.
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    Existing and Emerging Voluntary Market Renewable Energy Products for Corporations

    in China PAGE 13 © 2019 Center for Resource Solutions. All rights reserved.
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    PAGE 14 © 2019 Center for Resource Solutions. All rights

    reserved. Framework for Evaluation of Voluntary Renewable Energy Market Options in China
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    China: Existing Mechanisms PAGE 15 © 2019 Center for Resource

    Solutions. All rights reserved. Green Energy Certificates (GECs) On-site Renewables Direct Investment
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    China: Existing Mechanisms PAGE 17 © 2019 Center for Resource

    Solutions. All rights reserved. Green Energy Certificates (GECs) On-site Renewables Direct Investment
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    China: Emerging Mechanisms PAGE 18 © 2019 Center for Resource

    Solutions. All rights reserved. Direct Power Purchase • Bilateral Contracts • Centralized Bidding • Listed Transactions • Distributed market transactions Electric Retail Providers Other Voluntary Options • Coal Swaps • I-RECs
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    Evaluation of Voluntary Market Options PAGE 19 © 2019 Center

    for Resource Solutions. All rights reserved. VOLUNTARY MARKET TOOLS KEY BARRIERS AND CHALLENGES POTENTIAL POLICY INTERACTIONS Green Energy Certificates High Price, Linked to FIT, Not Available for All Renewable Energy Feed-In Tariff, Renewable Energy Quota System, Emissions Trading Scheme On-Site Renewables Limited Generation, GECs Not Available, Capital Requirements Feed-in Tariff Direct Investment No Renewable Usage Claims, Capital Requirements Feed-in Tariff Direct Power Purchase Complicated Transaction Pathway, GECs/Claims Not Always Available Feed-In Tariff, Renewable Energy Quota System Retail Green Power No Current Retail Options Available, Claims Difficult To Substantiate Feed-In Tariff, Renewable Energy Quota System IRECs Not Recognized By Government Feed-In Tariff, Renewable Energy Quota System, Emissions Trading Scheme Coal Swap No Renewable Usage Claims Renewable Energy Quota System
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    PAGE 23 Policy and Market Interactions © 2019 Center for

    Resource Solutions. All rights reserved.
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    Key Recommendations PAGE 25 © 2019 Center for Resource Solutions.

    All rights reserved. 1. Avoid double counting between the renewable energy quota and voluntary market 2. Continue to expand GECs eligibility for use with non-FIT projects and bundled procurement options 3. Prioritize and standardize procedures for bilateral contracts for renewable energy through the power exchanges. Coordinate with the GEC system 4. Use one certificate tracking system for both the renewable energy quota and voluntary markets in China
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    PAGE 26 © 2019 Center for Resource Solutions. All rights

    reserved. Report Links English version: https://resource-solutions.org/document/11131901/ Chinese version: https://resource-solutions.org/document/11131902/
  23. 27.

    Upcoming Events PAGE 27 © 2019 Center for Resource Solutions.

    All rights reserved. SINGAPORE APRIL 28, 2020
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    © 2019 Center for Resource Solutions. All rights reserved. Contact.

    Rachael Terada Director, Technical Projects rachael.terada@resource-solutions.org +1.415.561.2135 Orrin Cook Director, International Programs orrin.cook@resource-solutions.org +1.415.561.2106 www.resource-solutions.org