Since the promulgation of the Renewable Energy Law in January 2006, China's wind power and photovoltaic power generation have developed at a speed rarely seen in the world, and while achieving outstanding results, it also faces many challenges. In particular, the gap in subsidy funding for renewable energy generation has ballooned; The proportion of "abandoning wind and abandoning light" is rising. Looking back at history and examining the present, this book provides analysis and recommendations based on field research. We find that the fixed on-grid tariff system for wind power and photovoltaic power generation, which began in 2009 and 2011 respectively, although the rapid promotion of large-scale development of wind power and photovoltaic power generation installed capacity in a relatively short period of time plays a key role in China's green energy transformation, but in the context of the sharp decline in the cost of wind power and photovoltaic power generation, due to the serious slowness and lag of electricity price adjustment, resulting in too high subsidy amount, highly stimulating market investment willingness, and giving birth to a "black market" of 50,000 kilowatt photovoltaic project indicators The price can reach 20 million yuan of rent-seeking chaos. In addition to triggering the investment impulse of market players, the policy design of subsidy costs shared by the national electricity price also forms a resource allocation logic of "local invitations and central payments" at the institutional level, triggering local governments' investment hunger and administrative intervention, and laying hidden dangers of "heavy construction and light consumption" for the development of China's wind power and photovoltaic power generation. The investment in wind power and photovoltaic power generation triggered by high subsidies not only puts great pressure on financial subsidy funds, but also causes various frictions and contradictions with China's original rigid power system, promoting the rare problem of abandoning wind and light. Under the existing power system, power transmission and trading are bounded by provinces and "drawn as prisons", and cross-provincial transactions are full of difficulties, which seriously hinder the transmission and consumption of wind power and photovoltaic power generation. In the context of the economic downturn and the sharp decline in industrial electricity demand in the province, the problem of abandonment of wind and light in the Sanbei region is therefore the first to bear the brunt. The deeper problem is that although the policy design of fixed feed-in tariff combined with full guaranteed acquisition intends to promote the large-scale development of renewable energy with the original intention of "both price and quantity", economic laws show that "quantity" and "price" are difficult to achieve: given a fixed feed-in tariff, as long as the new installed capacity can obtain excess returns, even if the abandonment rate continues to rise, enterprises will continue to increase investment until the project income tends to the average rate of return in the industry. In a closed market with limited demand, high subsidies have become the most direct driver of high curtailment rate, while curtailment rate has become an important tool to regulate market supply by replacing prices, and it rises with the intensity of subsidies. In recent years, China's economic and environmental pollution situation has undergone major changes again. To this end, it is necessary to re-examine and calmly analyze the current new situation and choose practical policy ideas. Our analysis shows that under the current new situation, the historical factors that once gave rise to high subsidies for wind power and photovoltaic power generation have changed. The international experience of renewable energy development shows that the on-grid tariff bidding system has been welcomed and adopted by more and more countries with its unique market-oriented allocation of resources and the advantages of truly discovering and restoring power generation costs. We believe that to solve the current problems faced by wind power and photovoltaic power generation and promote their long-term sustainable development, the first is to restore the commodity and environmental attributes of wind power and photovoltaic power generation, and the second is to make the market and environment a decisive force for the allocation of scarce clean energy. We must get rid of the inertia of the previous subsidy thinking and return the subsidy policy to its environmental purpose: from the environmental perspective of reducing air pollution and carbon dioxide reduction, rather than from the perspective of achieving a certain development goal and a certain proportion. In particular, it is necessary to curb the tendency of policies to be hasty in order to accomplish tasks without regard for reality, at any cost. Based on the discussion of alternative policies, this book makes the following recommendations: 1. In the medium to long term, the introduction of environmental taxes should be used as an opportunity to eliminate power generation subsidies for new installations. We suggest that we make full use of the "double dividend" of environmental taxes, introduce environmental taxes (or carbon taxes) on air pollutant emissions and carbon emissions from coal-fired power generation on the premise of reducing other taxes and maintaining the total amount of tax revenue, and cancel the power generation subsidies for newly installed capacity in a timely manner while continuing to subsidize existing wind power and photovoltaic power generation projects according to the original contract until the expiration of the subsidy period. 2. In the short term, face difficulties and timely and decisively adjust the existing high-subsidy policy. We propose to set up a subsidy transition period when both environmental taxes and carbon trading markets are fully implemented in the future: during this transition period, the existing subsidy policy framework will be used for new installations, but the subsidy policy will need to be significantly adjusted; Upon the expiration of the transition period, the power generation subsidy for new installations will be cancelled, and the existing wind power and photovoltaic power generation projects that have been completed will continue to subsidize according to the original contract until the subsidy period expires. However, before the subsidy policy is withdrawn, the subsidy practice needs to be significantly adjusted as follows: (1) Efforts should be made to expand the scope of feed-in bidding projects. It is recommended that in the annual national installed capacity index, a part of the proportion is set aside for the implementation of on-grid tariff bidding nationwide, and unified bidding is carried out for all provinces in the country. (2) For wind power and photovoltaic power generation projects that are not included in the bidding, we recommend: (a) first link the average curtailment rate level of each resource area in the previous year, and according to the principle that the higher the average curtailment rate and the higher the downward adjustment range in the resource area, the on-grid price of existing new projects will be significantly reduced at one time to restrain the investment impulse of provincial governments and enterprises with high curtailment rate of wind and curtailment; (b) Increase the frequency of adjustment of the benchmark feed-in tariff for new wind power and photovoltaic power generation, and consider making annual adjustments according to the scale of new installations or the rate of wind and light curtailment; (c) Make full use of price tools to adjust the scale of new construction of wind power and photovoltaic power generation projects nationwide, and cancel the control of annual installed capacity plan indicators in a timely manner. 3. Based on the principle of "who benefits, who pays" and the consideration of reducing cross-subsidy of electricity prices, it is proposed to impose a renewable energy tariff surcharge of 1.9 cents per kWh for the full amount of residential electricity consumption to cope with the increasing subsidy gap. 4. Formulate reasonable and feasible minimum guaranteed utilization hours to promote the participation of wind power and photovoltaic power generation in electricity market transactions. We recommend that the National Energy Administration first set a minimum proportion of 15% of the province's adjustable power generation from wind power and photovoltaic power generation. For provinces where the proportion of wind power and photovoltaic power generation has not reached the minimum proportion, the grid company will make a full guarantee purchase of wind power and photovoltaic power generation in the province; For provinces where the proportion of wind power and photovoltaic power generation exceeds the minimum proportion, further consideration can be given: (1) the total amount of power generation within the proportion shall be allocated in equal proportions according to the installed capacity of wind power and photovoltaic power generation according to the existing methods, and this will be used as the basis for formulating the minimum guaranteed utilization hours of wind power and photovoltaic power generation in each province; (2) Wind power and photovoltaic power generation outside the proportion participate in market transactions. 5. Accelerate the reform of the electricity market and release the competitive advantages of wind power and photovoltaic power generation. The effective operation of the electricity market is an important guarantee for the development of wind power and photovoltaic power generation and the consumption of intermittent unstable electricity. We suggest: (1) first coordinate and promote the central government to break down the inter-provincial barriers to electricity market transactions, establish a unified electricity trading market on a larger scale, and expand the scope of power balance and the scale of cross-provincial and cross-regional transactions; (2) Accelerate the establishment of a spot trading market for electricity, give full play to the competitive advantage of zero marginal cost of wind power and photovoltaic power generation, and promote the full consumption of wind power and photovoltaic power generation by market means; (3) Establish a transaction of peak shaving and frequency regulation auxiliary services, so that wind power and photovoltaic power generation enterprises can solve their intermittent and unstable problems by purchasing peak shaving and frequency regulation auxiliary services from other power sources. 6. Be cautious about quota systems for non-hydro renewable energy. In the context of the severe segmentation of the electricity market and the difficulty of cross-provincial consumption of wind power and photovoltaic power generation, relevant policy makers hope to introduce a provincial-based renewable energy quota system as soon as possible to promote the cross-provincial purchase and sale of wind power and photovoltaic power generation. However, we believe that the current conditions for a quota system for non-hydro renewable energy are not yet ripe. First, renewable energy quotas and feed-in tariffs represent quantity control policies and price control policies, respectively, and the two policies cannot be implemented at the same time, otherwise the market cannot be cleared. Second, as long as the power generation right is in the hands of the provincial government, hastily promoting the renewable energy quota system and placing the obligation to complete the quota on the power generation enterprises may not break down inter-provincial barriers and promote the cross-provincial purchase and sale of wind power and photovoltaic power generation as the original intention of the policy design intended. Finally, if quotas for non-hydro renewable energy must be implemented, they should also be piloted in areas where conditions are ripe. In particular, the five provinces and cities of Hebei, Henan, Beijing, Tianjin and Shandong are not only the most serious areas of air pollution in China, but also geographically adjacent and the most qualified to become pilot areas for the non-hydro renewable energy quota system. We believe that under the premise of fully respecting the law of industrial development, formulating steady and pragmatic subsidy policies is an important guarantee for the sustainable development of wind power and photovoltaic power generation. With the advancement of technology and the continuous reduction of costs, wind power and photovoltaic power generation will eventually get rid of subsidies and gain a place in the power generation market with cost advantages. We believe that as long as we can adhere to the reform principle proposed by the Third Plenary Session of the 18th Central Committee of the Communist Party of China since the comprehensive deepening of reform, restore the attributes of energy commodities and let the market play a decisive role in resource allocation, and based on the original environmental intention of developing wind power and photovoltaic power generation, under the current new economic and environmental situation, seek truth from facts, reformulate appropriate subsidy policies, and vigorously promote the reform of electricity marketization, China's wind power and photovoltaic power generation will surely achieve long-term sustainable development and become an important part of China's power generation field.（AI翻译）