On June 6, 2017, the Friends of Nature Institute (FON) sued the State-owned enterprise, Gansu State Grid for its high abandonment rate of wind power in violation of Articles 2 and 14 of the Renewable Energy Law. Article 2 provides a definition of ‘renewables’, and Article 14 requires that the grid companies ‘purchase all electricity generated from renewable energy sources’ and ‘provide connection service’. In this case, Gansu State Grid purchased the electricity generated by wind power and solar energy, but did not connect it to the grid. Defendant provided a strict interpretation of Article 14 that a grid company does not have a duty to put all the renewable electricity it purchases on the grid. Though under Article 29 of the same law, a grid company is responsible for failure to purchase all electricity produced from renewable sources only if such failure were to cause economic damage to the producer, FON argued for an extensive explanation of Article 29 that the defendant’s high curtailment of wind and photovoltaic power resulting in GHG emissions should have been prevented, and that the Gansu State Grid shall be held responsible for the environmental damage caused by its use of coal-fired power. On August 14, 2018, the Lanzhou Intermediate People’s Court rejected the NGO’s claims on procedural grounds. The Court reasoned that the Gansu State Grid, because it is solely responsible for the acquisition and distribution of electricity, does not engage in activities that directly cause pollution or degradation. As a result, the applicant failed to meet the conditions for instituting an action. Unsatisfied by this decision, FON appealed to the High Court of Gansu Province. On December 28, 2018, the High Court of Gansu Province overruled the decision of the lower court. On the ground of Article 119 of the Civil Procedure Law, as there were specific defendant and claim, the High Court upheld the application on procedural issues and ordered the Gansu Mining Area Intermediate Court to hear the case. On June 5, 2019, the Gansu Mining Area Intermediate People's Court accepted the case and published the Court’s notice to inform the parties. The case is now being heard on its merits by the court. Due to the travel restriction after the outbreak of the Covid-19 pandemic in Gansu, the judges have held discussions with the parties but have not taken further action. The case is still pending.

Key environmental legal questions:

Whether a company's failure to connect renewable energy to the grid is unlawful as it generates additional GHG emissions.