The Chinese Ministry of Finance, NDRC and NEA recently jointly released the 7th renewables FIT list. Previously, the 6 lists covering FIT projects (non-hydro, agricultural wastes, MSW, small scale methane projects, wind and solar energy) were released separately. More details can be found on the Ministry of Finance website.
Our analysis of the lists shows that they include 274 biomass direct combustion and small methane projects, with a total installed capacity of 6258 MW; 335 MSW direct combustion and landfill gasification plants with total installed capacity of 4288 MW. By the end of 2020, the Chinese government has targeted to have 13129 MW biomass and 10010 MW WtE projects. Going forward, we see plenty of remaining fuel potential and therefore significant opportunities for investment in this industry.
It’s worth noting that only projects using agricultural waste, MSW direct combustion and methane projects will be eligible for national FIT. Projects that are co-firing with coal will no longer be granted national FIT; and for existing projects, local governments will take the responsibility to pay FIT bills.
The change of policy shows the strong determination of the government to develop 100% agricultural waste and MSW combustion plants to supply energy, improve the environment, speed the economic transformation and generate sustainable financial support. Over the previous decade, the central government has unswervingly encouraged biomass power, specifically biomass- based distributed heating. During this period, DPs biomass combustion solutions have maintained over 30% of market share in China.
