Impacts of renewable energy regulations on the structure of power generation in China – A critical analysis

China is facing a number of energy-related challenges such as shortage of electricity supply and environmental pollution. The Government recognized the important role the renewable energy plays in the power generation structure. As a result, a series of supporting policies, laws and regulations have been issued to boost the renewable energies in China. This paper provides a critical analysis of the policy framework for the renewable energy in China and its impacts on the power generation structure. The relevant policy documents, including the most recent government work report delivered by Premier Wen Jia-bao during the Third Session of the 11th National People’s Congress (NPC) in March 2010 are analyzed. The patterns of renewable energy developments are found strongly correlated with the promulgation of relevant policies.     

Wind power and photovoltaic power: How to improve the accommodation capability of renewable electricity generation in China?

China's wind curtailment and photovoltaic curtailment was one of the prominent issues in 2014, and the renewable curtailment worsened in 2015. With the rapid growth of renewables, the phenomenon of the insufficiency in renewable accommodation capability is becoming more and more serious in 2016. In that case, the problem of the insufficient accommodation capability is pointed out by analyzing China's development requirements. The renewable power generation scale, the renewable power consumption, and the restrictions on the renewable electricity generation are discussed from the China's market perspective. Meanwhile, the legal environment, the planning requirement, the institutional setting, and the policy tools are introduced from the perspective of governmental regulation. An empirical analysis, a cause analysis and a trend analysis are illustrated before explaining the problem of renewable curtailment and proposing a solution for enhancing the accommodation capability. According to the analysis results, the solution for addressing the wind curtailment and PV curtailment is offered with respect to the technology, the institution, the legislation, and the political aspect. Through the research, the research conclusions are drew finally and the corresponding policy recommendations are put forward.     

Capacity payment impact on gas-fired generation investments under rising renewable feed-in — A real options analysis

We assess the effect of capacity payments on investments in gas-fired power plants in the presence of different degrees of renewable energy technology (RET) penetration. Low variable cost renewables increasingly make investments in gas-fired generation unprofitable. At the same time, growing feed-in from intermittent RETs amplifies fluctuations in power generation, thus entailing the need for flexible buffer capacity—currently mostly gas-fired power plants. A real options approach is applied to evaluate investment decisions and timing of a single investor in gas-fired power generation. We investigate the necessity and effectiveness of capacity payments. Our model incorporates multiple uncertainties and assesses the effect of capacity payments under different degrees of RET penetration. In a numerical study, we implement stochastic processes for peak-load electricity prices and natural gas prices. We find that capacity payments are an effective measure to promote new gas-fired generation projects. Especially in times of high renewable feed-in, capacity payments are required to incentivize peak-load investments.     

Does electricity price matter for innovation in renewable energy technologies in China?

Though the development of renewable energy is rapid, innovation in renewable energy technologies is relatively weak due to the late commencement of renewable energy in China. In addition, renewable energy is mainly introduced into the supply mix of electricity generation, which increases the costs of electricity generation. Higher electricity price will make renewable energy more competitive and call forth renewable energy technological innovation. Based on FMOLS and DOLS models, as well as PMG model, this paper investigates the induced long and short run effects of electricity price, funding support, and economic growth on innovation in renewable energy technologies at the provincial level in China during the period 2006–2016. The Conclusions drawn were: (1) R&D expenditure and economic growth have positive impacts on innovation in renewable energy technologies in the long and short run; (2) Electricity price only has a long run effect on patenting in renewable energy technologies; (3) In the long run, a 1% increase in electricity price can lead to a 0.7825%–1.0952% increase in the patent counts of renewable energy technologies; (4) Electricity pricing system in China does not play any role in driving renewable energy technological innovation in the short run.     

Decarbonising power generation in China—Is the answer blowing in the wind?

This paper examines the current situation of wind industry development, evaluates the potentials of GHG mitigation and identifies the key determinants of scaling up wind power deployment in China. China has doubled its wind capacity every year for the past 4 years, the total installed capacity reached 12 Gigawatts (GW) and surpassed the 10-GW target 2 years ahead of schedule in the national plan for renewable energy development [38], [71], [87],and would reach 100–120 GW by 2020 according to the government’s new energy plan. It may become the biggest wind power generation and wind turbines manufacturing country of the world in the next years if the abundant wind resources and enormous domestic market can be harnessed with appropriate policies and efficient technology. The recent positive move in vigorous development of wind power in China implies that the total installed capacity will far exceed the targets of the government’s 2007 renewable energy plan. However, the prosperous Chinese wind market has also revealed some worrisome signals and weakness [28], [58], such as low capacity factor and frequent outage of wind farms, inadequate grid infrastructure, long distance transmission, low quality of turbines, adverse price bidding, nepotism in wind farm developer selection process and regulatory uncertainty and policy inconsistency which all conspire to hinder effective power generation in the massively new installed wind capacities. A coherent policy framework is required for creating enabling environment for accelerating wind energy penetration and state-of-art technology deployment in the country. It is argued that institutional, financial and technical capacity will need to be cemented to exploit the huge potentials of wind resources to meet the rapidly growing demand for electricity in China in the coming decades with minimised environmental implications.     

What information should be provided in communications on biomass power generation?

In order to promote the production and use of electricity generated from renewable energy sources, support schemes such as the Renewables Portfolio Standard and various green power programs have been implemented. When evaluating the costs and benefits associated with those schemes, people need accurate information about the characteristics of renewable generation. The objective of the present paper is to identify the kind of information to be provided to lay people in Japan in order to enhance their understanding of biomass generation. We used the two-stage “mental model” method to conduct open-ended interviews and a questionnaire survey to reveal people’s beliefs about biomass generation. From the survey results, it was identified that the information to be provided should include the following: (a) definitions of biomass and biomass generation, (b) specific generation technologies, (c) the carbon neutral concept of biomass, (d) non-use of energy food crops in Japan, (e) sustainable availability of resources under certain conditions, and (f) high generation costs with their causes, such as collection costs of resources.     

Does renewable energy generation decrease the volatility of electricity prices? An analysis of Denmark and Germany

Although variable renewable energy (VRE) technologies with zero marginal costs decrease electricity prices, the literature is inconclusive about how the resulting shift in the supply curves impacts price volatility. Because the flexibility to respond to high peak and low off-peak prices is crucial for demand-response applications and may compensate for the losses of conventional generators caused by lower average prices, there is a need to understand how the penetration of VRE affects volatility. In this paper, we build distributed lag models with Danish and German data to estimate the impact of VRE generation on electricity price volatility. We find that in Denmark wind power decreases the daily volatility of prices by flattening the hourly price profile, but in Germany it increases the volatility because it has a stronger impact on off-peak prices. Our analysis suggests that access to flexible generation capacity and wind power generation patterns contribute to these differing impacts. Meanwhile, solar power decreases price volatility in Germany. By contrast, the weekly volatility of prices increases in both areas due to the intermittency of VRE. Thus, policy measures for facilitating the integration of VRE should be tailored to such region-specific patterns.     

Dispatch modeling of a regional power generation system – Integrating wind power

A modeling tool has been developed which can be used to analyze interaction between intermittent wind power generation and thermal power plant generation in a regional electricity grid system. The model uses a mixed integer programming (MIP) approach to determine the power plant dispatch strategy which yields the lowest systems costs. In the model, each large thermal plant is described separately, including properties such as start-up time, start-up cost and minimum load level. The model is evaluated using western Denmark as a case study.For western Denmark, it is found that the inclusion of start-up performance (i.e. start-up time and related costs) and minimum load level of the power generating units have a significant impact on the results. It is shown that the inclusion of these aspects influences the analysis of the effect of wind power variations on the production patterns of thermal units in the system. The model demonstrates how the introduction of wind power production and associated variations change the dispatch order of the large thermal power plants in the western Denmark system so that the unit with the lowest running costs no longer has the highest capacity factor. It is shown that this effect only is detected if start-up performance and minimum load level limitations are included in the optimization. It can also be concluded that start-up performance and minimum load level must be taken into account if the total system costs and emissions are not to be underestimated. The simulations show that if these aspects are disregarded, both total costs and total emissions of the power system are underestimated, with 5% in the case of western Denmark. Models such as the one developed in this work can be efficient tools to understand the effects of large-scale wind power integration in a power generation system with base load plants.     

Does environmental regulation affect energy efficiency in China's thermal power generation? Empirical evidence from a slacks-based DEA model

Data envelopment analysis (DEA) has gained much popularity in performance measurement of power industry. This paper presents a slack-based measure approach to investigating the relationship between fossil fuel consumption and the environmental regulation of China's thermal power generation. We first calculate the total-factor energy efficiency without considering environmental constraints. An environmental performance indicator is proposed through decomposing the total-factor energy efficiency. The proposed approach is then employed to examine whether environmental regulation affects the energy efficiency of China's thermal power generation. We find that the environmental efficiency plays a significant role in affecting energy performance of China's thermal generation sector. Decreasing the discharge of major pollutants can improve both energy performance and environmental efficiency. Besides, we also have three main findings: (1) The energy efficiency and environmental efficiency were relatively low. (2) The energy and environmental efficiency scores show great variations among provinces. (3) Both energy efficiency and environmental efficiency are of obvious geographical characteristics. According to our findings, we suggest some policy implications.     

How to stimulate renewable energy power generation effectively? – China's incentive approaches and lessons

The renewable energy power generation (REPG) in China has experienced tremendous growth in the last decade. To understand this rapid growth, it is necessary to explore how Chinese government triggers the remarkable development of the industry. This paper offers a systematic analysis of the incentive policy system for REPG in China, covering wind power, solar photovoltaic, small hydropower (single-unit power generation capacity less than 50 MW), biomass power and geothermal power. The incentive system contains laws, regulations, policies and industrial plans issued during the 11th and 12th “Five-year Plan” periods (2006–2015). Four major incentive strategies of the Chinese government are identified: research and development incentives, fiscal and tax incentives, grid-connection and tariff incentives, and market development incentives. The results show these incentive methods have played a significant role in promoting the development of REPG in China, but still there are some problems associated with them. International comparisons of the incentive policies with those of Denmark, Germany and US, as well as the strategies to further improve the Chinese incentive approaches are discussed. This comprehensive analysis of China's incentive policy system for REPG helps to understand China's experience in promoting renewable energy, contributing to better decision-making in policy.     

Revised feed-in tariff for solar photovoltaic in the United Kingdom: A cloudy future ahead?

The United Kingdom (UK) started implementing a national Feed-In Tariff (FiT) mechanism on the 1 April 2010, which included specific payment tariffs for solar photovoltaic (PV) installations. However, a revised FiT rate has been put in place starting from 1 April 2012, applicable to any installations with an eligibility date of on or after 3 March 2012. This paper presents, first, an overview of solar PV installation in the UK. This followed by a general concept of the FiT in the UK before analyzing the financial impact of the new FiT rate on the consumers. Similar financial analysis is conducted with selected countries in Europe. The financial analysis investigates the total profit, the average rate of return and the payback period. It is found that the new FiT rate generates very low profit, minimum rate of return and a longer payback period, suggesting a downward trend of solar PV uptake in the future.     

Solar power generation in the US: Too expensive,or a bargain?

This article identifies the combined value that solar electric power plants deliver to utilities' rate payers and society's tax payers. Benefits that are relevant to utilities and their rate payers include traditional, measures of energy and capacity. Benefits that are tangible to tax payers include environmental, fuel price mitigation, outage risk protection, and long-term economic growth components. Results for the state of New York suggest that solar electric installations deliver between 15 and 40 ¢/kWh to ratepayers and tax payers. These results provide economic justification for the existence of payment structures (often referred to as incentives) that transfer value from those who benefit from solar electric generation to those who invest in solar electric generation.     

What are the resource benefits of circulating fluidized bed power generation technology? Take some key thermal power units in China as an example

Efficient use of natural resources is an important part of China's energy industry to achieve sustainable development. The promotion of circulating fluidized bed (CFB) boilers is an important way to save coal and other resources from the source. This article first analyzes the connotation of resource benefits generated by CFB boilers. From the perspective of CFB technology used for low-calorific value coal recycling, coal recovery rate and sustainable development of coal resources (mainly coal can extend mining time), the resource benefits obtained by CFB are analyzed. The resource benefits obtained were analyzed. Second, based on the input-output nonlinear optimization theory, aiming at maximizing the resource benefits of CFB technology, constructing a CFB technology resource benefit nonlinear optimization model, measuring output benefits-added value, that is, the extension time of coal years and coal mining recovery rate increased value. Finally, based on the installed capacity data of China's CFB technology units from 1990 to 2015, the model designed two scenarios for China's future CFB technology development, and predicted China's 2020 CFB machine assembly capacity and power generation. On this basis, by analyzing the degree of coal resource conservation and the extension of the exploitable years, the model derives the resource benefits generated by CFB technology under different scenarios and the impact on the sustainable development of China's coal resources. These conclusions provide a quantitative basis for China's future CFB technology development.     

The prospective of coal power in China: Will it reach a plateau in the coming decade?

Coal power holds the king position in China's generation mix and has resulted in ever-increasing ecological and environmental issues; hence, the development of the electric power sector is confronted with a series of new challenges. China has recently adopted a new economic principle of the “new economic normal,” which has a large effect on the projection electricity demand and power generation planning through 2020. This paper measures electricity demand based upon China's social and economic structure. The 2020 roadmap presents China's developing targets for allocating energy resources to meet new demands, and the 2030 roadmap is compiled based upon an ambitious expansion of clean energy sources. Results show that electricity demand is expected to reach 7500 TWh in 2020 and 9730 TWh in 2030. Coal power is expected to reach its peak in 2020 at around 970 GW, and will then enter a plateau, even with a pathway of active electricity substitution in place.     

Does FDI influence renewable energy consumption? An analysis of sectoral FDI impact on renewable and non-renewable industrial energy consumption

This study examines the link between foreign direct investment (FDI) and energy demand. FDI is a source of financing that allows businesses to grow. At the same time, FDI can be a source of innovation that promotes energy efficiency. Existing evidence on the impact of aggregate FDI inflows on energy consumption is scarce and inconclusive. In the current study, we disaggregate FDI inflows into mining, manufacturing, total services, and financial services components and examine the impact of these FDI flows on renewable – and non-renewable industrial energy – sources for 74 countries for the period 1985–2012. We employ a Blundell–Bond dynamic panel estimator to control for endogeneity and omitted variable biases in our panels. The results point broadly to an energy consumption-reducing effect with respect to non-renewable sources of energy and an energy consumption-augmenting effects with respect to renewable energy. We find that these effects vary in magnitude and significance by sectoral FDI.     

Focus on the development of offshore wind power in China: Has the golden period come?

In recent years, Chinese Government paid more attention to the exploitation of offshore wind power, and it became an important trend in the development of wind power industry. However, the development of offshore wind power in China was still in the initial stage. Compared with land-based wind power, the development of off-shore wind power had not only weaknesses and uncertainties, but also strengths and opportunities. In order to research the development of offshore wind power, this paper summarized the aspects on policy, market, technology and development planning of offshore wind power in China, and then adopted SWOT method to analyze the influencing factors, which impact on the development of China's offshore wind power. At last, this article analyzed the internal and external factors that affect the golden period of offshore wind power development, and drew a conclusion that the golden period of offshore wind power in China will come in the future, and most likely around 2020.     

Transition scenarios of power generation in China under global 2 °C and 1.5 °C targets

Under the Paris Agreement, targets implemented for 2100 specify temperature increases well below 2 °C, with an ambitious target of 1.5 °C. China signed this agreement and will support these global targets. The question remains whether they are possible, especially considering the slow progress in recent decades, despite the fact that the Kyoto Protocol implemented these targets in 2010. The Intergovernmental Panel on Climate Change (IPCC) required modeling research teams to analyze possible pathways, policy options, and cost benefit analyses for GHG mitigation. China’s CO₂ emissions from the energy and cement industries already accounted for almost 29% of global emissions in 2017, and this trend is expected to continue increasing. The role of China in global GHG mitigation is therefore crucial. This study presents a scenario analysis for China’s power generation against the background of the global 2 °C and 1.5 °C targets. We discuss the possibility of a lower CO₂ emission power generation scenario in China in order to evaluate the national emission pathway towards these targets. Our findings suggest that China can accomplish rapid transition in the power generation sector, reaching its emission peak before 2025. This would make the global 2 °C target possible because energy system development is a key factor. Furthermore, the recent progress of key power generation technologies, potential for further investment in the power generation sector, and recent policy implementation all significantly contribute to China following a low carbon emission development pathway.     

International cooperation on renewable energy development in China – A critical analysis

The past decades have witnessed the rapid growth of foreign participation in the renewable energy development in China. This is a result of massive energy demand and the Government’s strategy to shadow the role of traditional fossil fuel in the energy mix. This paper critically reviewed the international cooperation in the field of renewable energy with various partners in the new century. The cooperation pattern varies from partner to partner. The results showed that China has benefited from the international cooperation on renewable energy such as accessing to finance and advanced technologies, developing human resources related to renewable energy, and enhancing related policy framework. Major issues associated with the international cooperation are discussed as well.     

Captive power generation in Saudi Arabia—Overview and recommendations on policies

The power sector in the Kingdom of Saudi Arabia is undergoing the restructuring process. Moreover, during the last decade the Kingdom has witnessed a phenomenal growth in the load demand, consequently a huge amount of generation is added to the electric utilities to meet the load. Up to now only the electric utility generation was taken in the planning of the electrical sector. The data regarding the captive power generation was not readily available. A survey is conducted regarding the captive power generation in Saudi Arabia based on its utilization pattern, fuel used and amount of excess energy available to the grid. The existing regulatory framework and institutional structure of the Saudi power industry was also reviewed. Based on the information collected in the survey of captive power, key guidelines that may be considered in developing the policy for the captive power generators are presented. Furthermore, these guidelines and later the policies will help promote the investors to come forward in developing the captive power generation in Saudi Arabia.     

International cooperation on renewable energy electricity in China – A critical analysis

Facing the energy crisis and the requirement of green power, China is making great efforts to fulfill the international cooperation on renewable energy electricity aimed at protecting the security of electricity supply and economy development. This paper firstly utilizes the tool of SWOT strategy analysis to make a research on internal and external environment of international cooperation on renewable energy electricity in China. Secondly discusses the current situation and existing problems of international cooperation from four dimensions of strength, weakness, opportunity and threat. Then, gives a propose of four different kinds of international cooperation strategies based on the combination analysis of SWOT matrix. Finally puts forward the detailed implementation strategies of the policy recommendations for international cooperation on renewable energy electricity.