CHINA Law and Practice Contributed by: Yan Gao, Yilin Wang and Zhuohui Li, Zhong Lun Law Firm
4.3 Terms and Conditions Imposed on Approvals to Construct and Operate a Transmission Line and Associated Facilities Grid Connection Agreements Under the Electricity Law and the Guaranteed Pur- chase Measures, grid enterprises are required to sign a grid connection agreement and a grid connection scheduling agreement with the connecting generation enterprise, and, where applicable, a power purchase and sale contract. The grid connection scheduling agreement governs the technical and operational parameters of the connection, including voltage level, capacity, and the demarcation point of responsibility between the generation enterprise’s equipment and the grid enterprise’s facilities. Grid enterprises must also specify the construction timeline for grid connec- tion works in the parallel operation agreement. Where a generation enterprise and a grid enterprise cannot reach agreement on connection terms, the relevant electricity regulatory authority must mediate; where mediation fails, the regulatory authority may issue a binding decision pursuant to the Guaranteed Purchase Measures and the Energy Law. Generation enterprises suffering economic losses due to a grid enterprise’s failure to fulfil its connection obligations may seek compensation, and the NEA may impose a fine of up to the amount of such losses under the Guaranteed Purchase Measures. Self-Built Transmission Lines and Buy-Back Mechanism Under the Notice on Matters Relating to the Invest- ment and Construction of Transmission Works Asso- ciated with New Energy Projects (NDRC and NEA, effective 31 May 2021), where a grid enterprise is unable to complete grid connection works within a timeframe compatible with the generation project’s development schedule, the generation enterprise may independently invest in and construct the connection works. Upon completion, the generation enterprise and the grid enterprise may enter into a buy-back agreement, with the transfer price and other com- mercial terms determined by negotiation. Prior to any buy-back, the generation enterprise retains ownership and operational responsibility for the self-built works.
be incorporated into provincial power development plans. Project Approval Transmission grid projects are subject to govern- ment approval rather than filing, given their strate- gic resource allocation and significant public inter- est implications. Approval authority is determined by voltage level and geographical scope. Projects at approximately 500 kV and above involving cross- border or cross-provincial direct current transmission, and 500 kV, 750 kV and 1,000 kV alternating current transmission projects involving cross-border or cross- provincial transmission, are approved by the NDRC, with projects that are approximately 800 kV direct current and 1,000 kV alternating current additionally subject to State Council filing. Non cross-border, non cross-provincial projects at equivalent voltage levels are approved by provincial governments, with other transmission projects generally approved by local governments. Approving authorities must issue deci- sions within 20 working days of accepting an appli- cation, extendable to 40 working days for complex projects. Environmental Impact Assessment Transmission projects are subject to environmental review under the framework described in 3.2 Obtain- ing Approvals to Construct and Operate Generation Facilities . Given the scale and land occupation of large transmission line projects, a full Environmen- tal Impact Assessment Report is generally required. Approving authorities have direct power to issue bind- ing decisions. Licensing Following construction and completion acceptance, the operating entity must apply to the NEA for a transmission electric power business licence before commencing transmission operations. Transmission licences are issued by the NEA, are valid for 20 years, and specify the permitted transmission business scope and service area of the licence holder.
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