China adopts its first standards for renewable steel, cement, and polysilicon

According to a notice published by the National Development and Reform Commission on Friday, China has set for the first-time renewable energy mandates in the steel, polysilicon, and cement industries as well as some data centres.

Beijing's Renewable Portfolio Standards, or RPS (Renewable Portfolio Standards), set targets for the percentage that each province must achieve in terms of its power consumption from renewable sources.

David Fishman, principal of the Lantau Group - an energy consultancy - said in an online posting that the RPS previously only affected companies in the power trading industry and electrolytical aluminum industry.

Fishman, in his article on the new regulations, wrote: "Simple: Heavy industry must purchase green."

The targets for other industries are different by province. Market participants are watching the RPS targets closely, Yan Qin, principal analysts at ClearBlue markets, in an online posting. They are used to calculate how much renewable power will be included into China's contract for difference mechanism which represents a shift towards market-based pricing of renewables.

In this mechanism, the government reimburses generators when market prices drop below a certain level.

Hydro renewables and non hydro renewables are the sub-targets for non-data centres. The total renewables target for 2025 is 70% in hydropower-rich Yunnan, but only 24.2% in Fujian. Non-hydro targets are capped at 30% for wind and solar provinces such as Inner Mongolia, Gansu and Qinghai. Chongqing, a mountainous region, has a target set at just 10.8%.

The plan also included targets for 2026; these typically increase by a few percentages points every year.

(source: Reuters)