(Yicai) Oct. 30 -- China’s National Energy Administration has laid out a plan to correct improper market intervention by local governments this year, such as forced investments to develop wind power, solar energy, and pumped storage hydropower projects.

Some municipalities and local authorities have been requiring investors to make additional investment to support new energy and pumped storage projects, including in the areas of wind turbines, towers, polysilicon, silicon wafers, battery cells, and battery modules, according to the plan the NEA released on Oct. 27. They also have been impeding or discriminating against projects and investors that do not commit to supporting these sectors, it said.

Every provincial energy regulator is responsible for rectifying this situation, according to the NEA. Local governments must make corrections and create long-term systems, with rectifications to end on Nov. 30, it added. 

Provincial-level regions, including Hebei, Fujian, Hubei, Guizhou, Shanxi, and Xinjiang Uygur Autonomous Region have issued special rectification work plans that focus on compelled investment in wind power, solar and other new energy projects.

With the rapid development of new energy resources such as wind and solar in recent years, the sector has become a premium resource for many local governments, managers at a number of new energy firms told Yicai. Some governments have been allowing local firms to become shareholders in the projects of non-local developers, while requiring them to make additional investments in other local sectors, they noted. 

Some regions, especially less economically developed areas, are swapping local resources for industrial development, said Liu Manping, a senior economist at the price monitoring center of the National Development and Reform Commission. For instance, one county-level government required a solar project developer to also build a cattle farm costing CNY30 million (USD4.2 million) for 10,000 livestock, Liu added.

In August, the Chinese government issued a document to ban similar enforced additional investments in solar power generation projects. 

Editors: Zhang Yuhsuo, Martin Kadiev