The Ministry of Finance ("MOF") has recently distributed the Supplementary Circular on the Interim Measures for Management of Special Funds for Development of Renewable Energy (the "Circular"), immediately effective from the date of issuance.
The Circular states that special funds in support of development of renewable energy will be offered from 2019 till 2023, adding that special funds for development of renewable energy will be granted to finance programs aimed at rebuilding hydroelectric facilities in rural areas for higher efficiency and larger capacity. The amount of a grant will be determined according to this formula, i.e. the amount of a grant to a region = the grant standard × the installed capacity of the rebuilt power plants in this region (including that of the ecologically rebuilt plants and the newly built plants). The grand standard varies from region to region, specifically CNY700/kilowatt for eastern regions, CNY1,000/kilowatt for central regions and CNY1,300/kilowatt for western regions. Meanwhile, the Circular expressly states that special funds for development of renewable energy may be used to support exploitation and utilization of unconventional types of natural gas, such as coalbed methane (mashgas in coal mines), shale gas and tight gas. From 2019, the larger the capacity grows, the more special funds the government will offer. In the event that the amount of natural gas currently exploited and utilized surpasses the last year's figure, additional awards will be offered progressively, depending on the excess amount; however, if the amount of natural gas currently exploited and utilized is small than the preceding year's number, the grant will be reduced accordingly, depending on the amount of shortage.