China’s renewable energy policy: Commitments and challenges

The passing of the Renewable Energy Law (REL) in 2005 demonstrated China’s commitment to renewable energy development. In the 3 years after the REL, China’s renewable electricity capacity grew rapidly. From 2006 to 2008, China’s wind capacity installation more than doubled every year for 3 years in a row. However, three facts prevent us from being optimistic about China’s renewable electricity future. First, considered as a share of total capacity, renewable electricity capacity is decreasing instead of increasing. This is due simply to the rapid growth of fossil fuel capacity. Second, a significant amount of renewable generation capacity is wasted because it is not connected to the electricity grid. Finally, renewable electricity plants are running at a low level of efficiency. Based on an in-depth analysis of China’s existing renewable energy policy, we suggest that these challenges should be dealt with by introducing a market-based mandatory renewable portfolio requirement coupled with strong regulatory monitoring of grid enterprises.     

The effect of energy end-use efficiency improvement on China’s energy use and CO2 emissions: a CGE model-based analysis

With its rapid economic growth, China is now confronted with soaring pressure from both its energy supply and the environment. To deal with this conflict, energy end-use efficiency improvement is now promoted by the government as an emphasis for future energy saving. This study explores the general equilibrium effect of energy end-use efficiency improvement on China’s economy, energy use, and CO₂ emissions. This paper develops a static, multisector computable general equilibrium model (CGE) for China, with specific detail in energy use and with the embodiment of energy efficiency. In order to explore the ability of subsidizing non-fossil-generated electricity on moderating potential rebound effects, in this model, the electricity sector was deconstructed into five specific generation activities using bottom–up data from the Chinese electricity industry. The model is calibrated into a 16-sector Chinese Social Accounting Matrix for the year 2002. In the analysis, seven scenarios were established: business as usual, solely efficiency improvement, and five policy scenarios (taxing carbon, subsidized hydropower, subsidized nuclear power, combination of taxing carbon and subsidized hydropower, combination of taxing carbon and subsidized nuclear power). Results show that a sectoral-uniform improvement of energy end-use efficiency will increase rather than decrease the total energy consumption and CO₂ emissions. The sensitivity analysis of sectoral efficiency improvement shows that efficiency improvements happened in different sectors may have obvious different extents of rebound. The three sectors, whose efficient improvements do not drive-up total national energy use and CO₂ emissions, include Iron and Steel, Building Materials, and Construction. Thus, the improvement of energy end-use efficiency should be sectoral specific. When differentiating the sectoral energy-saving goal, not only the saving potential of each sector but also its potential to ease the total rebound should be taken into account. Moreover, since the potential efficiency improvement for a sector over a certain period will be limited, technology measures should work along with a specific policy to neutralize the rebound effect. Results of policy analysis show that one relatively enhanced way is to combine carbon taxing with subsidized hydropower.     

Household electricity demand forecast and energy savings potential for Vientiane,Lao PDR

This paper uses the survey data on household electricity demand from five districts of Vientiane, Lao PDR, for the demand projection up to 2030 using the end-use model. The scenario analysis is used to verify the potential of an energy-saving program by alternating selected appliances with more energy-efficient ones following the labelling standard of Thailand. The demographic structure of electrified households and the energy efficiency of electric appliances are considered as the dominant factors affecting electricity demand. Under the base-case scenario, the total electricity demand of Vientiane increased from 593?GWh in 2013 to 965?GWh in 2030. In the energy efficiency scenario, it is revealed that the appliance standard enhancement program can save total electricity demand in 2030 by 147?GWh (?15.2%), where 117?GWh (?12.1%) of which is contributed by the air conditioner and 30?GWh (?3.1%) by the lighting equipment.     

Revisiting CO2 mitigation potential and costs in China’s electricity sector

To improve the reliability of sectoral mitigation potential and cost analysis, this paper made an in-depth exploration into China’s electricity sector’s thermal efficiency and inner structure. It is found that unlike what many literatures portray, China is actually among the world’s leaders in coal-fired power plants’ generating efficiencies; besides, although there are still numerous small and inefficient generating units in the current generation fleet, many of them are in fact playing important roles in supporting local economic development, meeting peak load needs, balancing heat and electricity supply and providing job opportunities to the local economy, therefore their existence does not necessarily mean low-cost mitigation potential. Given the efficiency and structural characteristics of China’s electricity sector, it is pointed out that some other mitigation options, such as demand side management, IGCC and renewable energy as well as the break-through of CCS technology may play an even more important role in emission reduction. Considering the significant lock-in effects in electricity sector, it is warned that China, if continues putting majority investment in large and advanced coal-fired generating units, will face another round of chasing-after for the new and advanced renewable generation technologies. Therefore China should put more efforts in renewable generation technologies now.     

Unveiling China’s impact on African environment

China’s economic involvement in Africa has recently attracted unprecedented global attention. Chinese interest in the oil, gas and other natural resources on the continent entails – it is alleged – more harm than good for Africa’s environment. Yet much of the discussion about China’s role in Africa is conducted in the absence of the most basic information and raw data. We believe that despite all the obvious informational obstacles, the secrecy veil on the China’s African involvement can be lifted. And this, in turn, could produce a more accurate picture of the real impact on the Africa’s environment.     

Energy efficiency standards for refrigerators in Brazil: A methodology for impact evaluation

In Brazil energy efficiency standards for cold appliances was established in 2007. A specified single set of MEPS (minimum energy performance standards) for refrigerators, freezers and freezer refrigerators was implemented without evaluating its impacts and estimation of potential electricity savings. This paper presents a methodology for assessing the impacts of the Brazilian MEPS for cold appliances. It uses a bottom-up approach to estimate residential end-use consumption and to evaluate the energy saving potential for refrigerators. The household electricity consumption is projected by modeling appliance ownership using an econometric approach based on the recent household survey data. A cost–benefit analysis for more stringent standards is presented from the perspective of the society and electricity customers. The results showed that even considering the current market conditions (high discount rate for financing new efficient equipment) some MEPS options are advantageous for customers. The analysis also demonstrates significant cost-effective saving potential from the society perspective that could reach 21 TWh throughout the period of 2010–2030—about 25% of current residential consumption.     

Principles, effects and problems of differential power pricing policy for energy intensive industries in China

The Chinese government canceled the preferential power pricing policies for energy intensive industries and imposed a reverse differential pricing policy in order to promote energy efficiency and the adjustment and upgrading of the industrial structure. This article analyzes the principles of China’s differential power pricing policy, the externalities of energy and the modified Ramsey pricing rule, and also points out the policy implications of China’s differential power pricing policy. In our samples, we investigate eight power intensive products in the Henan province with respect to their power consumption per unit (power intensity), electricity cost, total cost, the electricity tariff and profit, in order to test the effects of the differential power pricing policy. The results show that the primary effect of the differential power pricing policy is that enterprises decrease their total costs and improve their productive efficiencies in advance, in anticipating a higher electricity tariff.     

US energy conservation and efficiency policies: Challenges and opportunities

Expanding energy conservation and efficiency in every sector nationwide is one of the most cost-effective instruments for reducing US energy imports, the trade deficit and energy’s environmental impacts. For these reasons, energy conservation and efficiency have been essential elements of US energy policy since the oil embargos and price spikes of the 1970s. The Energy Independence and Security Act of 2007 (EISA) is the latest federal legislation to expand and strengthen US energy conservation and efficiency policies, programs, and practices. Specifically, EISA and its recent predecessor, the Energy Policy Act of 2005 (EPAct05), contain almost 200 titles with new provisions for energy conservation and efficiency aimed at improvements in vehicle fuel economy. These provisions include efficiency of appliances and lighting; energy savings in residential, commercial, and government buildings; the efficiency of industrial manufacturing plants; and the efficiency of electric power delivery and end-use. These actions have begun to contribute to new federal, state, and local policies, programs, and practices across the US, and expectations are high for increases in the level of energy savings. This paper summarizes the history of US energy conservation and efficiency policies, outlines EISA’s and EPAct05’s key provisions, and considers prospects for the future.     

Is China ready for its nuclear expansion?

China’s rapid pace of nuclear energy growth is unique, and its impact on the global nuclear market as both a customer and potential future supplier is already tremendous and will continue to expand. It is crucial to understand this energy policy development and its impact on various global areas. Unfortunately, there is relatively limited English-language information available about China’s nuclear power industry and its current development. This paper aims to provide a comprehensive assessment of the Chinese nuclear energy program and policy, reviewing its past, present, likely future developments, as well as to consider potential challenges that deserve further attention. This paper will explore reasons that have caused the existing industry, describe China’s nuclear bureaucracy and decision making process to understand how different stakeholders play a role in China’s nuclear energy development. This study concludes that China’s existing nuclear program and industry, in combination with its current stable economic and political environment, provides a sound foundation for the planned nuclear expansion. However, challenges which are crucial to the success of the nuclear expansion will need to be addressed.     

Changes in industrial electricity consumption in china from 1998 to 2007

Electricity consumption in the industrial sector experienced a dramatic increase between 1998 and 2007, accounting for approximately 75% of China’s total electricity consumption. This study analyzes the potential factors influencing the growth of electricity consumption in China’s industrial sector over the past decade using a logarithmic mean Divisia index I decomposition method. Results show that activity effect and shift effect (caused by the change in the electricity’s share of industrial energy use) are the major factors responsible for the rise in electricity consumption between 1998 and 2007. It is found that structural change also contributed to the increase in electricity consumption, it had only a small effect. In contrast, the technological effect is responsible for a decrease in electricity consumption during this period. The influences of technological effects and shift effects followed approximately an inverse-U-shaped and U-shaped curve, respectively. Furthermore, the results show that the main contributors to incremental electricity consumption among industrial subsectors were manufacturing of raw chemical material and products, manufacturing of non-metal mineral products, smelting and pressing of ferrous and non-ferrous metals, and production and supply of electric power and heat power. These sectors should take priority for industrial restructuring in order to implement policies for energy and electricity savings.     

Examining the driving forces for improving China’s CO2 emission intensity using the decomposing method

This paper examines the driving forces for reducing China’s CO₂ emission intensity between 1998 and 2008, utilizing the logarithmic mean divisia index (LMDI) technique. By first grouping the CO₂ emissions into two categories, those arising from activities related to the electric power industry and those from other sources, emission intensity is further broken down into the effects of the CO₂ emission coefficient, energy intensity of power generation, power generation and consumption ratio, electricity intensity of the gross domestic product (GDP), provincial structural change, and the energy intensity of the GDP for other activities. The decomposition results show that improvements in the energy intensity of power generation, electricity intensity of GDP, and energy intensity of GDP for other activities were mainly responsible for the success in reducing China’s CO₂ emission intensity and that activities related to the electric power industry played a key role. It is also revealed that performance varied significantly at the individual province level. The provinces with higher emission levels contributed the most to China’s improvements in CO₂ emission intensity.     

Implementation of energy efficiency standards of household refrigerator/freezer in China: Potential environmental and economic impacts

Due to the rapid economic development, living standards in China are improving fast. Chinese families are having more household electrical appliances, among which refrigerators are indispensable. Energy consumption of refrigerators is huge in China and causes environmental concerns. China has issued the national energy efficiency standards of household refrigerators, GB12021.2-2003 and GB12021.2-2008 to promote high-efficiency refrigerator production and use. This study evaluated the impacts of the standards on the environment, manufacturers and consumers over a long-term period of 2003–2023. It first evaluated the potential electricity conservation and GHG emission reduction resulting from energy efficiency improvements driven by the standards. Next, manufacturers’ technological and economic concerns about complying with the standards were discussed. Some efficiency improving design options were considered and the resulting increases in manufacturing cost and retail price were estimated. The return of consumers from invest in efficiency was analyzed based on lifecycle cost saving of the improved models. The economical viability of the standards was then evaluated by national consumer costs and benefits. Results showed that the considered efficiency standards will potentially save a cumulative total of 588–1180 TWh electricity, and reduce emission of 629–1260 million tons of CO₂, 4.00–8.04 million tons of SO_x and 2.37–4.76 million tons of NO_x by 2023, depending on sale share of models by efficiency. In a more environmentally optimal case (75% sale share of high-efficiency models), the national consumer benefits are 121 billion RMB (discounted), with the benefit/cost ratio of consumer’s expenditure being 1.45:1. However, the preference to high-efficiency models is substantial influenced by consumer’s expectation on return from the additional cost on efficiency.     

Why is China going nuclear?

In November 2007, China’s State Council approved its “Medium- and Long-Term Nuclear Power Development Plan”, which set as a goal to increase the nation’s nuclear capacity from about 7 to 40 GWe by 2020. In March 2008, the National Development and Reform Commission suggested installed nuclear power capacity might even exceed 60 GWe by 2020 due to faster than expected construction. Even with this growth, nuclear power’s share of China’s installed total capacity would be only about 5 percent. Yet China’s rapid nuclear expansion poses serious financial, political, security, and environmental challenges. This study investigates China’s claim that nuclear energy is necessary to meet its growing energy demands by analyzing China’s energy alternatives and assessing their likelihood of contributing to total Chinese capacity. By looking at China’s transformative energy policy from several perspectives, this study finds that nuclear energy is indeed a necessity for China.     

Improving energy efficiency and smart grid program analysis with agent-based end-use forecasting models

Electric utilities and regulators face difficult challenges evaluating new energy efficiency and smart grid programs prompted, in large part, by recent state and federal mandates and financial incentives. It is increasingly difficult to separate electricity use impacts of individual utility programs from the impacts of increasingly stringent appliance and building efficiency standards, increasing electricity prices, appliance manufacturer efficiency improvements, energy program interactions and other factors. This study reviews traditional approaches used to evaluate electric utility energy efficiency and smart-grid programs and presents an agent-based end-use modeling approach that resolves many of the shortcomings of traditional approaches. Data for a representative sample of utility customers in a Midwestern US utility are used to evaluate energy efficiency and smart grid program targets over a fifteen-year horizon. Model analysis indicates that a combination of the two least stringent efficiency and smart grid program scenarios provides peak hour reductions one-third greater than the most stringent smart grid program suggesting that reductions in peak demand requirements are more feasible when both efficiency and smart grid programs are considered together. Suggestions on transitioning from traditional end-use models to agent-based end-use models are provided.     

Towards a 100% hydrogen domestic gas network: Regulatory and commercial barriers to the first demonstrator project in the United Kingdom

In the debate on the decarbonisation of heat, renewable electricity tends to play a much more dominant role than green gases, despite the potential advantages of gas in terms of utilising existing transportation networks and end-use appliances. Informed comparisons are hampered by information asymmetry; the renewable electricity has seen a huge grid level deployment whereas low-carbon hydrogen or bio-methane have been limited to some small, stand-alone trials. This paper explores the regulatory and commercial challenges of implementing the first UK neighbourhood level 100% low-carbon hydrogen demonstration project. We draw on existing literature and action research to identify the key practical barriers currently hindering the ability of strategically important actors to accelerate the substitution of natural gas with low carbon hydrogen in local gas networks. This paper adds much needed contextual depth to existing generic and theoretical understandings of low-carbon hydrogen for heat transition feasibility. The learnings from pilot projects, about the exclusion of hydrogen calorific value from the Local Distribution Zone calorific value calculation, Special Purpose Vehicle companies, holding of liability and future costs to consumers, need to be quickly transferred into resilient operational practice, or gas repurposing projects will continue to be less desirable than electrification using existing regulations, and with more rapid delivery.     

Policy drivers for improving electricity end-use efficiency in the USA: an economic–engineering analysis

This paper estimates the economically achievable potential for improving electricity end-use efficiency in the USA from a sample of policies. The approach involves identifying a series of energy efficiency policies tackling market failures and then examining their impacts and cost-effectiveness using Georgia Institute of Technology's version of the National Energy Modeling System. By estimating the policy-driven electricity savings and the associated levelized costs, a policy supply curve for electricity efficiency is produced. Each policy is evaluated individually and in an integrated policy scenario to examine policy dynamics. The integrated policy scenario demonstrates significant achievable potential: 261 TWh (6.5 %) of electricity savings in 2020 and 457 TWh (10.2 %) in 2035. All 11 policies examined were estimated to have lower levelized costs than the average electricity retail price. Levelized costs range from 0.5 to 8.1 cents/kWh, with the regulatory and information policies tending to be most cost-effective. Policy impacts on the power sector, carbon dioxide emissions, and energy intensity are also estimated to be significant.     

Hybrid modeling of China’s vehicle ownership and projection through 2050

As representative for emerging vehicle market, China has one of the fastest growing rates of automobile ownership in the world. The huge and increasing vehicle stock has significantly contributed to the fast growing of China’s energy demand and GHG emissions. It is an important issue to project China’s vehicle ownership, which to a large extent determines China’s oil demand and GHG emissions from road transportation sector in the future. In this study, we established a hybrid model with three sub models to simulate the growth patterns of China’s private passenger vehicles, urban public transport vehicles and economic utility vehicles. By using this model, we projected that China’s vehicle population would reach 184.8, 363.8 and 606.7 million by 2020, 2030 and 2050 respectively. The fast increase of urban private passenger vehicles is the main driving force for vehicle population growth. Population of urban private passenger vehicles would account for 70.1%, 81.1% and 86.1% of total vehicle population in 2020, 2030 and 2050 respectively. It was demonstrated by sensitivity analysis that vehicle population was quite sensitive to household income and vehicle price, implying an effective lever for regulating the growth of vehicle population.     

Assessment of long-term sustainable end-use energy demand in Romania*

Romania is the 10th largest economy in EU-28 and also one of the fastest growing economies in the region. An end-use energy demand model is developed for Romania to assess energy requirement by sector and by end-use for 2015–2050 period. Industry would surpass residential sector as the largest final energy-consuming sector from 2035 onwards. Services sector would exhibit the fastest growth of energy consumption. Despite expected decline in country’s population, demand for electricity would grow in the future driven by increased household income and expanded services sector, which is relatively electricity intensive. Still, Romania’s per capita electricity consumption would be about half of the EU-28 average. At the end-use level, thermal processes in industry, space heating in the residential and services, and road passenger travel in transport sector would be dominant throughout the study period. Improvement of energy efficiency in the heating system exhibits the highest potential of energy saving.     

Estimating the potential for electricity savings in households

Improving efficiency in the use of energy is an important goal for many nations since end-use energy efficiency can help to reduce CO₂ emissions. Furthermore, since the residential sector in industrialised countries requires around one third of the end-use electricity, it is important for policy makers to estimate the scope for electricity saving in households to reduce electricity consumption by using appropriate steering mechanisms. We estimate the level of technical efficiency in the use of electricity using data from a Swiss household survey. We find an average inefficiency in electricity use by Swiss households of around 20 to 25%. Bottom-up economic-engineering models estimate the potential in Switzerland to be around 15%. In this paper we use a sub-vector input distance frontier function based on economic foundations. Our estimates lie at the upper end of the electricity saving potential estimated by the afore-mentioned economic-engineering approach.     

Tariff-based incentives for improving coal-power-plant efficiencies in India

Improving the efficiency of coal-based power plants plays an important role in improving the performance of India's power sector. It allows for increased consumer benefits through cost reduction, while enhancing energy security and helping reduce local and global pollution through more efficient coal use. A focus on supply-side efficiency also complements other ongoing efforts on end-use efficiency. The recent restructuring of the Indian electricity sector offers an important route to improving power plant efficiency, through regulatory mechanisms that allow for an independent tariff setting process for bulk purchases of electricity from generators. Current tariffs based on normative benchmarks for performance norms are hobbled by information asymmetry (where regulators do not have access to detailed performance data). Hence, we propose a new incentive scheme that gets around the asymmetry problem by setting performance benchmarks based on actual efficiency data, rather than on a normative basis. The scheme provides direct tariff-based incentives for efficiency improvements, while benefiting consumers by reducing electricity costs in the long run. This proposal might also be useful for regulators in other countries to incorporate similar incentives for efficiency improvement in power generation.