How much have electricity shortages hampered China's GDP growth?

Based on an econometric analysis of the annual growth data for China's GDP and electricity generation from 1953 to 2010, we find that electricity generation growth Granger causes GDP growth, but not vice versa. We also find that the GDP elasticity of electricity generation is about 0.6, implying that a 1% increase in China's electricity generation growth would increase GDP growth by 0.6%. While Deng's reform raised China's GDP growth rate by about 5% per year, it did not alter the GDP elasticity of electricity generation. Hence, an obvious strategy to promote China's economic growth would be accelerating electricity generation expansion. Rapidly adding thermal generation units, however, could have large-scale, adverse environmental impacts. We therefore support China's 2011 five-year plan, which calls for expanding investments in renewable energy, conservation and energy efficiency as well as improving China's integrated electricity planning and cost-based pricing decisions.     

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.     

Modelling of electricity savings in the Danish households sector: from the energy system to the end-user

In this paper, we examine the value of investing in energy-efficient household appliances from both an energy system and end-user perspectives. We consider a set of appliance categories constituting the majority of the electricity consumption in the private household sector, and focus on the stock of products which need to be replaced. First, we look at the energy system and investigate whether investing in improved energy efficiency can compete with the cost of electricity supply from existing or new power plants. To assess the analysis, Balmorel, a linear optimization model for the heat and power sectors, has been extended in order to endogenously determine the best possible investments in more efficient home appliances. Second, we propose a method to relate the optimal energy system solution to the end-user choices by incorporating consumer behaviour and electricity price addition due to taxes. The model is non-exclusively tested on the Danish energy system under different scenarios. Computational experiments show that several energy efficiency measures in the household sector should be regarded as valuable investments (e.g. an efficient lighting system) while others would require some form of support to become profitable. The analysis quantifies energy and economic savings from the consumer side and reveals the impacts on the Danish power system and surrounding countries. Compared to a business-as-usual energy scenario, the end-user attains net economic savings in the range of 30–40 EUR per year, and the system can benefit of an annual electricity demand reduction of 140–150 GWh. The paper enriches the existing literature about energy efficiency modelling in households, contributing with novel models, methods, and findings related to the Danish case.     

Decarbonizing Europe's power sector by 2050 — Analyzing the economic implications of alternative decarbonization pathways

The European Union aims to reduce greenhouse gas emissions by 80–95% in 2050 compared to 1990 levels. The transition towards a low-carbon economy implies the almost complete decarbonization of Europe's power sector, which could be achieved along various pathways. In this paper, we evaluate the economic implications of alternative energy policies for Europe's power sector by applying a linear dynamic electricity system optimization model in over 36 scenarios. We find that the costs of decarbonizing Europe's power sector by 2050 vary between 139 and 633 bn €₂₀₁₀, which corresponds to an increase of between 11% and 44% compared to the total system costs when no CO₂ reduction targets are implemented. In line with economic theory, the decarbonization of Europe's power sector is achieved at minimal costs under a stand-alone CO₂ reduction target, which ensures competition between all low-carbon technologies. If, however, renewable energies are exempted from competition via supplementary renewable energy (RES-E) targets or if investments in new nuclear and CCS power plants are politically restricted, the costs of decarbonization significantly rise. Moreover, we find that the excess costs of supplementary RES-E targets depend on the acceptance of alternative low carbon technologies. For example, given a complete nuclear phase-out in Europe by 2050 and politically implemented restrictions on the application of CCS to conventional power plants, supplementary RES-E targets are redundant. While in such a scenario the overall costs of decarbonization are comparatively high, the excess costs of supplementary RES-E targets are close to zero.     

Sustainable convergence of electricity and transport sectors in the context of a hydrogen economy

This paper analyzes the electricity and transport sectors within a single integrated framework and presents the capabilities of this integrated approach to realize an environmentally and economically sustainable transport sector based on fuel cell vehicles (FCVs). A comprehensive robust optimization planning model for the transition to FCVs is developed, considering the constraints of both electricity and transport sectors. This model is finally applied to the real case of Ontario, Canada to determine the Ontario’s grid potential to support these vehicles in the transport sector for a planning horizon ending in 2025. With a reasonable trade-off between optimality and conservatism, it is found that more than 170,000 FCVs can be introduced into Ontario’s transport sector by 2025 without jeopardizing the reliability of the system or any additional grid investments such as new power generation and transmission installations.     

Exuberance in China's renewable energy investment: Rationality,capital structure and implications with firm level evidence

The new century has witnessed phenomenal worldwide growth in renewable energy investments. China has been especially remarkable, surpassing both the US and the EU in 2013. Some recent facts, however, have raised the question of whether exuberant investment in China’s renewable energy sector is rational. This paper aims to contribute to the literature and to the debate in two ways. First, it tests the over-investment hypothesis based on the main stream finance methodology; second, it analyzes the role of capital structure in the performance of China's renewable energy firms. Empirical results show that overinvestment in the renewable energy sector exists. The problem is more significant in the biomass and wind sector. Capital structure is found to be more important to downstream firms, indicating that policy makers may provide support that enables these firms to finance their investments through corporate bonds, commercial credit, or long-terms debts.     

Households’ willingness to pay for safeguarding security of natural gas supply in electricity generation

Security of energy supply is a major issue for all EU Member States due to Europe's increasing dependence on imported fossil-fuel sources and the continuous rise in energy demand. The latter is of particular importance in electricity sector given the continuously increasing use of gas for electricity generation. In order to properly tackle with the problem, concerted actions are required by the EU Member States in several levels, i.e. legislative, political, etc. Nevertheless, these actions will come at an additional cost paid by the society either through increased electricity bills or through public financing for energy security investments. Thus, such policies should be justified on the basis of cost-benefit analysis. Towards this direction, it may be necessary to take into account non-market costs and benefits, i.e. the value that consumers place on interruptions avoided. In order to explore households’ perceptions and willingness to pay for securing gas supply for electricity production, an empirical study was conducted by means of the contingent valuation method. The results indicate that consumers are willing to pay a premium on their electricity bills in order to internalize the external costs of electricity production, in terms of energy security, which are caused from imported fuels.     

Evaluation of potential co-benefits of air pollution control and climate mitigation policies for China's electricity sector

Since the rapid industrialisation, local air pollution has become one of China's most important environmental issues. In consequence, increasingly stringent air pollution control policies have been established by the Chinese government. These policies will inevitably affect China's future electric power investment given the key contribution of this sector to air pollution. This sector is also a key contributor to China’s greenhouse gas emissions and hence climate policy efforts. We present a study exploring what impacts of potential interactions and combinations of different policy efforts for local air pollutant control and carbon mitigation have on China's future electricity generation mix. The study utilises a novel generation portfolio model that explicitly incorporates key uncertainties in future technology costs and different policy approaches including carbon pricing and air emissions control. The findings highlight that China can achieve significant reductions for both greenhouse gas and local air pollutant emissions through a combination of climate change and air pollution control policies. Furthermore, there are potentially significant co-benefits from the perspectives of both air pollutant control and carbon mitigation and, notably, that the co-benefit from a sufficient carbon pricing policy to air pollution emission reductions is much stronger than that from stringent air pollutant control policies to carbon mitigation. Specifically, in order to achieve substantial local air pollution and greenhouse gas mitigation from China's electricity sector, it is necessary to close coal-fired power plants rather than merely seeking to clean their air pollution emissions up.     

Analysis of the market penetration of clean coal technologies and its impacts in China's electricity sector

This paper discusses policy instruments for promoting the market penetration of clean coal technologies (CCTs) into China's electricity sector and the evaluation of corresponding effects. Based on the reality that coal will remain the predominant fuel to generate electricity and conventional pulverized coal boiler power plants have serious impacts on environment degradation, development of clean coal technologies could be one alternative to meet China's fast growing demand of electricity as well as protect the already fragile environment. A multi-period market equilibrium model is applied and an electricity model of China is established to forecast changes in the electricity system up to 2030s. Three policy instruments: SO₂ emission charge, CO₂ emission charge and implementing subsidies are considered in this research. The results show that all instruments cause a significant shift in China's electricity structure, promote CCTs’ competitiveness and lead China to gain great benefit in both resource saving and environment improvement. Since resource security and environment degradation are becoming primary concerns in China, policies that could help to gain generations’ market share of advanced coal-based technologies such as CCTs’ is suitable for the current situation of China's electricity sector.     

Hydrogen in China: Policy,program and progress

The paper introduces the role of energy in China economy context, criteria for sustainable development in energy sector, China's hydrogen vision, the role of hydrogen in China's R&D plan, recently launched national programs, and progresses and achievements in research, development and demonstration. The paper concludes that with fast economy development in the new era in China, the energy sector has been confronted with severe challenges in terms of supply security, environment pollution and greenhouse gas emission, and China has attached significant priority on research and development in hydrogen and fuel cell areas, as one of effective counter-measures to address these challenges. Transition to the hydrogen economy in China, a long-term, non-carbon energy solution, is believed to play a significant role, complementary to electricity, in the future sustainable energy system. It is recommended that more priority be attached for R&D in secondary industry, especially the utilization of hydrogen and fuel cell in stationary power generation from coal gasification.     

Determinants of China's energy imports: An empirical analysis

Sustained economic growth in China has triggered a surge of energy imports, especially oil imports. This paper investigates the determinants of China's energy import demand by using cointegraiton and VECM techniques. The findings suggest that, in the long run, growth of industrial production and expansion of transport sectors affect China's oil imports, while domestic energy output has a substitution effect. Thus, as the Chinese economy industrializes and the automotive sector expands, China's oil imports are likely to increase. Though China's domestic oil production has a substitution effect on imports, its growth is limited due to scarce domestic reserve and high exploration costs. It is anticipated that China will be more dependent on overseas oil supply regardless of the world oil price.     

Price and expenditure elasticities of residential energy demand during urbanization: An empirical analysis based on the household-level survey data in China

Urbanization, one of the most obvious characteristics of economic growth in China, has an apparent “lock-in effect” on residential energy consumption pattern. It is expected that residential sector would become a major force that drives China's energy consumption after urbanization process. We estimate price and expenditure elasticities of residential energy demand using data from China's Residential Energy Consumption Survey (CRECS) that covers households at different income levels and from different regional and social groups. Empirical results from the Almost Ideal Demand System model are in accordance with the basic expectations: the demands for electricity, natural gas and transport fuels are inelastic in the residential sector due to the unreasonable pricing mechanism. We further investigate the sensitivities of different income groups to prices of the three types of energy. Policy simulations indicate that rationalizing energy pricing mechanism is an important guarantee for energy sustainable development during urbanization. Finally, we put forward suggestions on energy pricing reform in the residential sector based on characteristics of China's undergoing urbanization process and the current energy consumption situations.     

Analysis on the carbon trading approach in promoting sustainable buildings in China

With the high growth urbanization and increasing new urban population, the huge demand for infrastructures and dwellings has become a great challenge for the sustainable development in Chinese cities. The building sector shares one fourth of total energy consumption in the country and plays an important role in reducing the energy consumption and the consequential green house gas (GHG) emissions. Some policies have been issued for promoting the low carbon sustainable development in China's buildings. However, existing barriers especially the investment barriers substantially prevent the low carbon technologies and service from being employed effectively. The carbon trading scheme of cap-and-trade is now widely accepted as one cost-effective way to deal with the climate change issue in the world, and it can be utilized for overcoming the barriers to carbon reduction activities in China's building sector. A new Clean Development Mechanism (CDM) energy performance based method is designed for reducing transaction costs in implementing CDM projects in China's buildings before 2020. And then a “step by step” approach is formed to establish the domestic and international carbon trading mechanism to effectively reduce GHG missions in China's building sector after 2020.     

Using energy scenarios to explore alternative energy pathways in California

This paper develops and analyzes four energy scenarios for California that are both exploratory and quantitative. The business-as-usual scenario represents a pathway guided by outcomes and expectations emerging from California's energy crisis. Three alternative scenarios represent contexts where clean energy plays a greater role in California's energy system: Split Public is driven by local and individual activities; Golden State gives importance to integrated state planning; Patriotic Energy represents a national drive to increase energy independence. Future energy consumption, composition of electricity generation, energy diversity, and greenhouse gas emissions are analyzed for each scenario through 2035. Energy savings, renewable energy, and transportation activities are identified as promising opportunities for achieving alternative energy pathways in California. A combined approach that brings together individual and community activities with state and national policies leads to the largest energy savings, increases in energy diversity, and reductions in greenhouse gas emissions. Critical challenges in California's energy pathway over the next decades identified by the scenario analysis include dominance of the transportation sector, dependence on fossil fuels, emissions of greenhouse gases, accounting for electricity imports, and diversity of the electricity sector. The paper concludes with a set of policy lessons revealed from the California energy scenarios.     

From state monopoly to renewable portfolio: Restructuring China's electric utility

Deregulation and decentralization in the electricity sector have thrived worldwide since the early 1980s. China also started restructuring its electricity industry since the mid-1980s. The reform shares many common features with restructuring practices in other countries and exhibits some unique characteristics as well. To some extent, two features, namely governmental administrative departments’ dual role of government and business inherited from a highly centralized planned economy, and the coal-intensive nature of power generation, has determined many aspects of the evolution of China's electric power sector. This paper aims to provide a comprehensive account of the process with some emphasis on recent developments. We also identify some of the features that are similar to electricity market reforms in other countries and, most importantly, those that characterize the uniqueness of the restructuring practices in China's electricity industry through investigating the administrative framework, price and investment mechanisms, and associated legislation and policy settings at each of the five stages in the evolution of the electric utility sector. The paper concludes with a discussion and summary of some generic characteristics and remaining challenges.     

Using natural gas generation to improve power system efficiency in China

China's electricity sector faces the challenge of managing cost increases, improving reliability, and reducing its environmental footprint even as operating conditions become more complex due to increasing renewable penetration, growing peak demand, and falling system load factors. Addressing these challenges will require changes in how power generation is planned, priced, and dispatched in China. This is especially true for natural gas generation, which is likely to play an important role in power systems worldwide as a flexible generation resource. Although natural gas is commonly perceived to be economically uncompetitive with coal in China, these perceptions are based on analysis that fails to account for the different roles that natural gas generation plays in power systems—baseload, load following, and peaking generation. Our analysis shows that natural gas generation is already cost-effective for meeting peak demand in China, resulting in improved capacity factors and heat rates for coal-fired generators and lower system costs. We find that the largest barrier to using natural gas for peaking generation in China is generation pricing, which could be addressed through modest reforms to support low capacity factor generation.     

Hydrogen economy transition in Ontario – Canada considering the electricity grid constraints

This paper investigates the feasibility of electrolytic hydrogen production for the transport sector during off-peak periods in Ontario. This analysis is based on the existing electricity system infrastructure and its planned future development up to 2025. First, a simplified but realistic zonal based model for Ontario's electricity transmission network is developed. Then, based on Ontario's Integrated Power System Plan (IPSP), a zonal pattern of generation capacity procurement in Ontario from 2008 to 2025 is proposed, specifying the total effective generation capacity in each zone that contributes to base-load energy. Finally, an optimization model is developed to find the optimal size of hydrogen production plants to be developed in different zones, as well as optimal hydrogen transportation routes to achieve a feasible hydrogen economy penetration in Ontario up to 2025. The proposed model is shown to be an effective planning tool for electrolysis based hydrogen economy studies. The results of the present study demonstrate that the present and projected electricity grid in Ontario can be optimally exploited for hydrogen production, achieving 1.2–2.8% levels of hydrogen economy penetration by 2025 without any additional grid or power generation investments beyond those currently planned.     

Analysis of China's energy utilization for 2007

China is the world's second-largest energy producer and consumer, so that it is very necessary to analyze China's energy situation for saving energy consumption and reducing GHG emission. Energy flow chart is taken as a useful tool for sorting out and displaying energy statistics data. Energy statistics data is the premise and foundation for analyzing energy situation. However, there exit many differences between China and foreign energy balance. Based on the international criterion of energy balance and some advices given by related experts, the author properly adjusts China's energy balance. And the purpose of this paper is to draft China's energy flow chart for 2007, which is used to study the characteristics of energy production and consumption in China. We find that: (1) coal is the main energy in China, which accounted for 73.2% of total energy supply in 2007; (2) thermal power accounted for 83.2% of the total electricity supply, and 78.43% thermal power was based on coal; (3) in 2007, the secondary industrial sector consumed about 69.93% of energy; (4) China's energy utilization efficiency was about 33.23% in 2007.