China is expected to raise a tariff surcharge on power generated from renewable energy sources by 50 percent over two years to encourage investment in wind and solar projects, according to the China Electricity Regulatory Commission.

Grid operators now charge 0.004 yuan per kilowatt hour more in selling power from renewable sources than conventional thermal power.

But the fee charged could raise about 10 billion yuan (US$1.5 billion) per year, only enough to cover 70 percent of the funds needed to subsidize clean energy producers in China in 2010, China Power News reported yesterday, citing Huang Shaozhong, a vice chief of the price and financial supervision department under the CERC.

This subsidy will grow as China aims to raise the share of non-fossil fuels to 15 percent in total energy mix by 2020, Huang said.

China may raise the surcharge to 0.006 yuan per kWh this year or in 2012, he said. The government last raised the surcharge in 2009 by doubling it.

China's renewable energy law, passed in 2006, requires power distributors to buy all the power generated by renewable energy projects - more expensive and usually unstable - but also allows them to charge the additional fees when they sell the power.

Meanwhile, Bloomberg News reported yesterday China will cut its 2020 target for nuclear power capacity of 80 gigawatts following Japan's atomic crisis, citing Ren Dongming, head of renewable energy development center under the National Development and Reform Commission.

Instead, China will raise the current 2020 goal for installed solar capacity of 20GW, Ren told a Beijing conference.