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Challenges to China's transition to a low carbon electricity system

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  • Kahrl, Fredrich
  • Williams, Jim
  • Jianhua, Ding
  • Junfeng, Hu
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    Abstract

    We examine the challenges to China's transition to a low carbon electricity system, in which renewable energy would play a significant role. China's electricity system currently lacks the flexibility in planning, operations, and pricing to respond to conflicting pressures from demand growth, rising costs, and environmental mandates in a way that simultaneously maintains reliability, decarbonizes the system, and keeps prices within acceptable bounds. Greater flexibility crucially requires the ability to more systematically and transparently manage and allocate costs. This will require re-orientating sector institutions still rooted in central planning, and strengthening independent regulation. Some of the necessary changes require fundamental political and legal reforms beyond the scope of energy policy. However, the system's flexibility can still be increased through the development of traditional planning and regulatory tools and approaches, such as an avoided cost basis for energy efficiency investments, more integrated planning to improve the coordination of generation, transmission, and demand-side investments, and a transparent ratemaking process. The judicious application of OECD electricity sector experience and skills can support these developments.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 39 (2011)
    Issue (Month): 7 (July)
    Pages: 4032-4041

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    Handle: RePEc:eee:enepol:v:39:y:2011:i:7:p:4032-4041

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    Web page: http://www.elsevier.com/locate/enpol

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    Keywords: China Low carbon electricity Renewable energy;

    References

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    Cited by:
    1. Wei Jin, 2012. "Can Technological Innovation Help China Take on Its Climate Responsibility? A Computable General Equilibrium Analysis," CAMA Working Papers 2012-51, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Hu, Junfeng & Kwok, Gabe & Xuan, Wang & Williams, James H. & Kahrl, Fredrich, 2013. "Using natural gas generation to improve power system efficiency in China," Energy Policy, Elsevier, vol. 60(C), pages 116-121.
    3. Romankiewicz, John & Marnay, Chris & Zhou, Nan & Qu, Min, 2014. "Lessons from international experience for China's microgrid demonstration program," Energy Policy, Elsevier, vol. 67(C), pages 198-208.
    4. Becker, Bastian & Fischer, Doris, 2013. "Promoting renewable electricity generation in emerging economies," Energy Policy, Elsevier, vol. 56(C), pages 446-455.
    5. Valentine, Scott Victor, 2014. "The socio-political economy of electricity generation in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 32(C), pages 416-429.
    6. Zha, Donglan & Ding, Ning, 2014. "Elasticities of substitution between energy and non-energy inputs in China power sector," Economic Modelling, Elsevier, vol. 38(C), pages 564-571.
    7. Ding, Yi & Yang, Hongliang, 2013. "Promoting energy-saving and environmentally friendly generation dispatching model in China: Phase development and case studies," Energy Policy, Elsevier, vol. 57(C), pages 109-118.

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