Central financial subsidies after the retreat of clean heating to meet the test of burning coal again

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This autumn and winter in the northern region clean heating renovation work continues to advance. A few days ago, the State Council held a video and telephone conference on keeping warm and supplying the northern regions this winter and next spring to make arrangements. Then Huang Runqiu, minister of the Ministry of Ecology and Environment, went to two cities in Hebei Province to investigate and emphasized the strict prevention of loose coal from re-burning.


According to the previous introduction of the Ministry of Ecology and Environment, the treatment of clean heating and scattered coal is one of the most difficult tasks in air pollution control in recent years. On the one hand, “coal-to-gas” and “coal-to-electricity” contributed more than 1/3 to the reduction of PM2.5; on the other hand, the high renovation cost also increased the heating burden of rural residents.


Financial subsidies are one of the main means of relying on various places, but this year is also the first autumn and winter when the central government's financial subsidies have declined. It is worth paying attention to how the clean heating work will be promoted next. How to effectively activate market means, cultivate users' habits of green energy use, effectively prevent the re-burning of scattered coal, and find a solution suitable for the local area, perhaps the test for the northern cities has really begun.


State Council calls for continuity of subsidy policy

Bulk coal replacement is an important part of clean heating transformation. It is reported that coal is mainly used for heating in winter in the northern region, and about 400 million tons of standard coal are consumed each year, of which scattered coal (including coal for small low-efficiency boilers) accounts for about half, mainly distributed in rural areas. For the same 1 ton of coal, the emission of air pollutants from scattered coal is more than 10 times that of coal-fired power plants, and scattered coal has become one of the "culprits" of smog in northern regions in autumn and winter.


Zhao Yingmin, deputy minister of the Ministry of Ecology and Environment, introduced at the press conference of the State Council Information Office on the 21st that during the "13th Five-Year Plan" period, my country concentrated its efforts on promoting the management of scattered coal in the Beijing-Tianjin-Hebei region, surrounding areas, and the Fenwei Plain. More than 25 million households have been treated with scattered coal, and the replacement of scattered coal has been basically completed in about 200,000 square kilometers south of Beijing.


With the coming of autumn and winter this year, the replacement of clean heating loose coal has attracted attention again. On October 23, Vice Premier Han Zheng of the State Council emphasized in a teleconference on keeping warm and supplying the northern regions this winter and next spring that it is necessary to ensure that there will be no problems with people's livelihood such as "coal-to-gas", to ensure the stability of volume and price, and to strictly implement the "gas-based system". To maintain the continuity of the subsidy policy.


Similarly, the previous statement by the Ministry of Ecology and Environment also gave a "reassurance" to the outside world's concern about the decline in subsidies. In May of this year, Liu Bingjiang, director of the Atmospheric Department of the Ministry of Ecology and Environment, said at a regular press conference of the Ministry of Ecology and Environment that in recent years, after evaluation, "coal-to-gas" and "coal-to-electricity" have contributed more than 1/3 to the reduction of PM2.5. He also said that some provinces have announced continuous subsidies, and the subsidies will not be easily withdrawn.


The Ministry of Ecology and Environment stated that it will strictly prevent the re-burning of scattered coal


On September 24, the "China Scattered Coal Comprehensive Treatment Research Report 2020" (hereinafter referred to as the "Report") compiled by He Kebin, academician of the Chinese Academy of Engineering and Dean of the School of Environment of Tsinghua University, was released. The "Report" introduced, 2017-2019 , The clean heating pilot projects in the north have been expanded from the initial 12 to 43 in 2019, and the central and local governments have invested more than 100 billion yuan.


At present, the central financial subsidy is one of the important sources of funds for local governments to promote clean heating renovation. According to the previous deployment, the time limit for the subsidy policy is 2017-2019. After the three-year period expires, if there is no additional transformation task, the central financial subsidy will be withdrawn and the local government will bear it by itself.


The outside world is worried that the reduction of subsidies will increase the heating cost of the people, which will affect the promotion of the replacement of loose coal and bring the risk of re-burning of loose coal. According to the 2019 survey on satisfaction with clean heating in four provinces and eight cities, 43% of users indicated that they would use scattered-fired coal to varying degrees without subsidies, and 34% of them indicated that they would re-use traditional scattered-fired coal for heating, 9 % of users indicated that they would use scattered coal as auxiliary heating energy.


On October 23-24, Huang Runqiu, Minister of the Ministry of Ecology and Environment, went to Handan City and Baoding City, Hebei Province to investigate the replacement of clean heating and scattered coal. He emphasized that it is necessary to further strengthen market supervision, resolutely ban scattered coal, and strictly prevent the re-burning of scattered coal.

Clean heating cannot fully count on financial subsidies


Why do officials repeatedly emphasize the continuity of the clean heating subsidy policy? Taking "coal-to-electricity" and "coal-to-gas" as examples, the heating cost is 3-4 times that of traditional scattered coal heating, and the income of residents in rural areas is low, and the high-cost clean heating scheme has affected the willingness of villagers to transform. The "Report" estimates that in the 39 pilot cities (excluding the 4 district and county-level pilot cities), the average growth rate of natural gas heating expenditure is 56.3%, and the average growth rate of electric heating expenditure is 89.3%.


Although subsidies are an effective way to replace loose coal, they are not a "curative solution" because the finance cannot fully afford such a high transformation cost. Take the “coal-to-electricity” project in Beijing as an example. Each household has an annual subsidy index of 10,000 kilowatt-hours of electricity, and each kilowatt-hour of electricity is subsidized at 0.2 yuan. If this subsidy intensity is extended to all northern regions, the operating costs alone will require an annual subsidy of 200-300 billion yuan. The huge initial investment has not been considered.


"It is impractical to completely cover the cost of clean heating through financial subsidies and administrative price cuts, and it is necessary to find dividends through optimal allocation of resources." The relevant person in charge of the Electricity Department of the National Energy Administration has previously stated that promoting clean heating is essentially a policy-guided heating field . Supply-side structural reforms. Completely relying on financial subsidies and the "wait and see" policy will not be able to do a good job of clean heating, and all localities must explore a set of clean heating models that suit them according to their actual conditions.


The person in charge said that clean heating should achieve a model of "enterprise-based, government-driven, and residents-affordable". The government uses fiscal and price policies as "medicine primers" to establish a benign market environment, guarantee basic people's livelihood needs, and implement key environmental protection tasks; enterprises use their respective professional advantages to discover the dividends brought by the market's optimal allocation of resources and improve the quality of clean heating; user establishment Green and intensive modern energy use habits.


The previous "Planning" set a goal that by 2021, the clean heating rate in the northern region will reach 70%. Strive to use about 5 years to basically realize the clean heating of scattered coal in urbanized areas with severe smog, and form a clean heating market that is fair, open, diversified, and has a high level of service.


After the central financial subsidies and even local financial subsidies gradually decline, how to effectively activate market means, cultivate users' green energy consumption habits, effectively prevent the re-burning of scattered coal, and find a local solution may be the real test for the northern cities.


-------The content of this article comes from Southern Metropolis Daily, edited by Heat Pump Industry Information---------