Recently, the National Energy Administration has issued the Circular on Establishment of a Monitoring and Early Warning Mechanism to Promote the Sustainable and Sound Development of Wind Power Industry (the "Circular").
The Circular specifies that indicators of the monitoring and early warning mechanism for wind power investments are classified into policy indicators, resource and operation indicators, and economic indicators. The ultimate risk early warning results shall be determined by the weighted average of the aforesaid three types of indicators, and early warning degrees are classified into red, orange and green grades from high to low, and the target year of early warning shall be one year after the year of issue. According to the Circular, the indicators mainly include the early warning indicator of implementation progress of a wind power plan, the early warning indicator of policy environment for wind power development, the rate of waste wind power resources, annual utilization hours and the year-on-year decrease in transaction prices. The Circular clarifies that if the average utilization hours of wind power in the year before issue are less than the hours of minimum guarantee acquisition set in the relevant region, the risk early warning result will be directly set as red; if the rate of waste wind power resources exceeds 20% in the relevant region in the year before issue, the risk early warning result will be set as orange or above. Relevant early warning results will be used to guide wind power development investments in the provinces.