IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v69y2014icp179-185.html
   My bibliography  Save this article

The impact of the CDM (clean development mechanism) on the cost price of wind power electricity: A China study

Author

Listed:
  • Zhao, Zhen-Yu
  • Li, Zhi-Wei
  • Xia, Bo

Abstract

As a renewable energy source, wind power is playing an increasingly important role in China's electricity supply. Meanwhile, China is also the world's largest market for clean development mechanism (CDM) wind power projects. Based on the data of 27 wind power projects of Inner Mongolia registered with the Executive Board of the United Nations (EB) in 2010, this paper constructs a financial model of net present value (NPV) to analyze the cost price of wind power electricity. A sensitivity analysis is then conducted to examine the impact of different variables with and without certified emission reduction (CER) income brought about by the CDM. It is concluded that the CDM, along with static investment and annual wind electricity production, is one of the most significant factors in promoting the development of wind power in China. Additionally, wind power is envisaged as a practical proposition for competing with thermal power if the appropriate actions identified in the paper are made.

Suggested Citation

  • Zhao, Zhen-Yu & Li, Zhi-Wei & Xia, Bo, 2014. "The impact of the CDM (clean development mechanism) on the cost price of wind power electricity: A China study," Energy, Elsevier, vol. 69(C), pages 179-185.
    • Handle: RePEc:eee:energy:v:69:y:2014:i:c:p:179-185
    DOI: 10.1016/j.energy.2013.10.050
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S036054421300902X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2013.10.050?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Teng, Fei & Zhang, Xiliang, 2010. "Clean development mechanism practice in China: Current status and possibilities for future regime," Energy, Elsevier, vol. 35(11), pages 4328-4335.
    2. Pechak, Olena & Mavrotas, George & Diakoulaki, Danae, 2011. "Role and contribution of the clean development mechanism to the development of wind energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(7), pages 3380-3387, September.
    3. Qiu, Yueming & Anadon, Laura D., 2012. "The price of wind power in China during its expansion: Technology adoption, learning-by-doing, economies of scale, and manufacturing localization," Energy Economics, Elsevier, vol. 34(3), pages 772-785.
    4. Zhao, Zhen Yu & Zuo, Jian & Feng, Tian Tian & Zillante, George, 2011. "International cooperation on renewable energy development in China – A critical analysis," Renewable Energy, Elsevier, vol. 36(3), pages 1105-1110.
    5. Yang, Ming & Nguyen, François & De T'Serclaes, Philippine & Buchner, Barbara, 2010. "Wind farm investment risks under uncertain CDM benefit in China," Energy Policy, Elsevier, vol. 38(3), pages 1436-1447, March.
    6. Dechezleprêtre, Antoine & Glachant, Matthieu & Ménière, Yann, 2009. "Technology transfer by CDM projects: A comparison of Brazil, China, India and Mexico," Energy Policy, Elsevier, vol. 37(2), pages 703-711, February.
    7. Seres, Stephen & Haites, Erik & Murphy, Kevin, 2009. "Analysis of technology transfer in CDM projects: An update," Energy Policy, Elsevier, vol. 37(11), pages 4919-4926, November.
    8. Liu, Wen & Lund, Henrik & Mathiesen, Brian Vad, 2011. "Large-scale integration of wind power into the existing Chinese energy system," Energy, Elsevier, vol. 36(8), pages 4753-4760.
    9. Wang, Qiang & Chen, Yong, 2010. "Barriers and opportunities of using the clean development mechanism to advance renewable energy development in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(7), pages 1989-1998, September.
    10. Zhao, Zhen-yu & Yan, Hong & Zuo, Jian & Tian, Yu-xi & Zillante, George, 2013. "A critical review of factors affecting the wind power generation industry in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 499-508.
    11. Lewis, Joanna I., 2010. "The evolving role of carbon finance in promoting renewable energy development in China," Energy Policy, Elsevier, vol. 38(6), pages 2875-2886, June.
    12. Zhao, Zhen-yu & Ling, Wen-jun & Zillante, George & Zuo, Jian, 2012. "Comparative assessment of performance of foreign and local wind turbine manufacturers in China," Renewable Energy, Elsevier, vol. 39(1), pages 424-432.
    13. Li, Cun-bin & Lu, Gong-shu & Wu, Si, 2013. "The investment risk analysis of wind power project in China," Renewable Energy, Elsevier, vol. 50(C), pages 481-487.
    14. Schubel, P.J., 2010. "Technical cost modelling for a generic 45-m wind turbine blade producedby vacuum infusion (VI)," Renewable Energy, Elsevier, vol. 35(1), pages 183-189.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Du, Yimeng & Takeuchi, Kenji, 2019. "Can climate mitigation help the poor? Measuring impacts of the CDM in rural China," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 178-197.
    2. Fan, Xiao-chao & Wang, Wei-qing, 2016. "Spatial patterns and influencing factors of China׳s wind turbine manufacturing industry: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 482-496.
    3. Epari Ritesh Patro & Teegala Srinivasa Kishore & Ali Torabi Haghighi, 2022. "Levelized Cost of Electricity Generation by Small Hydropower Projects under Clean Development Mechanism in India," Energies, MDPI, vol. 15(4), pages 1-16, February.
    4. Mo, Jian-Lei & Agnolucci, Paolo & Jiang, Mao-Rong & Fan, Ying, 2016. "The impact of Chinese carbon emission trading scheme (ETS) on low carbon energy (LCE) investment," Energy Policy, Elsevier, vol. 89(C), pages 271-283.
    5. Zeng, Ming & Yang, Yongqi & Wang, Lihua & Sun, Jinghui, 2016. "The power industry reform in China 2015: Policies, evaluations and solutions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 94-110.
    6. Beibei Shi & Lei Wu & Rong Kang, 2021. "Clean Development, Energy Substitution, and Carbon Emissions: Evidence from Clean Development Mechanism (CDM) Project Implementation in China," Sustainability, MDPI, vol. 13(2), pages 1-18, January.
    7. Jin Guo & Hanqiao Yang, 2022. "CDMs’ effect on environmentally sensitive productivity: evidence from Chinese provinces," Letters in Spatial and Resource Sciences, Springer, vol. 15(3), pages 401-422, December.
    8. Zhang, Yue-Jun & Sun, Ya-Fang & Huang, Junling, 2018. "Energy efficiency, carbon emission performance, and technology gaps: Evidence from CDM project investment," Energy Policy, Elsevier, vol. 115(C), pages 119-130.
    9. Shuai Chen & Jiameng Yang, 2023. "Environmental Pollution Liability Insurance Pricing and the Solvency of Insurance Companies in China: Based on the Black–Scholes Model," IJERPH, MDPI, vol. 20(2), pages 1-21, January.
    10. Zhao, Zhen-Yu & Chen, Yu-Long & Thomson, John Douglas, 2017. "Levelized cost of energy modeling for concentrated solar power projects: A China study," Energy, Elsevier, vol. 120(C), pages 117-127.
    11. Xiaoru Zhuang & Xinhai Xu & Wenrui Liu & Wenfu Xu, 2019. "LCOE Analysis of Tower Concentrating Solar Power Plants Using Different Molten-Salts for Thermal Energy Storage in China," Energies, MDPI, vol. 12(7), pages 1-17, April.
    12. Mandaloufas, Melissa & Lamas, Wendell de Queiroz & Brown, Scott & Irizarry Quintero, Anamari, 2015. "Energy balance analysis of the Brazilian alcohol for flex fuel production," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 403-414.
    13. Damilola Elizabeth Babatunde & Olubayo Moses Babatunde & Tolulope Olusegun Akinbulire & Peter Olabisi Oluseyi, 2018. "Hybrid Energy Systems Model with the Inclusion of Energy Efficiency Measures: A Rural Application Perspective," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 310-323.
    14. Zhou, Shan & Yang, Pu, 2020. "Risk management in distributed wind energy implementing Analytic Hierarchy Process," Renewable Energy, Elsevier, vol. 150(C), pages 616-623.
    15. Catalina Hernández & Rodrigo Barraza & Alejandro Saez & Mercedes Ibarra & Danilo Estay, 2020. "Potential Map for the Installation of Concentrated Solar Power Towers in Chile," Energies, MDPI, vol. 13(9), pages 1-15, April.
    16. Rahman, Shaikh M. & Spalding-Fecher, Randall & Haites, Erik & Kirkman, Grant A., 2018. "The levelized costs of electricity generation by the CDM power projects," Energy, Elsevier, vol. 148(C), pages 235-246.
    17. Gao, Cuixia & Sun, Mei & Geng, Yong & Wu, Rui & Chen, Wei, 2016. "A bibliometric analysis based review on wind power price," Applied Energy, Elsevier, vol. 182(C), pages 602-612.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao, Zhen-yu & Sun, Guang-zheng & Zuo, Jian & Zillante, George, 2013. "The impact of international forces on the Chinese wind power industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 131-141.
    2. Mo, Jian-Lei & Agnolucci, Paolo & Jiang, Mao-Rong & Fan, Ying, 2016. "The impact of Chinese carbon emission trading scheme (ETS) on low carbon energy (LCE) investment," Energy Policy, Elsevier, vol. 89(C), pages 271-283.
    3. Lam, J.C.K. & Woo, C.K. & Kahrl, F. & Yu, W.K., 2013. "What moves wind energy development in China? Show me the money!," Applied Energy, Elsevier, vol. 105(C), pages 423-429.
    4. Daniela Marconi & Francesca Sanna-Randaccio, 2012. "The clean development mechanism and technology transfer to China," Questioni di Economia e Finanza (Occasional Papers) 129, Bank of Italy, Economic Research and International Relations Area.
    5. Tian Tang & David Popp, 2014. "The Learning Process and Technological Change in Wind Power: Evidence from China's CDM Wind Projects," NBER Working Papers 19921, National Bureau of Economic Research, Inc.
    6. Tian Tang & David Popp, 2014. "The Learning Process and Technological Change in Wind Power: Evidence from China's CDM Wind Projects," CESifo Working Paper Series 4705, CESifo.
    7. 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.
    8. Weitzel, Matthias & Liu, Wan-Hsin & Vaona, Andrea, 2013. "Determinants of technology transfer through CDM: The case of China," Kiel Working Papers 1889, Kiel Institute for the World Economy (IfW Kiel).
    9. Bhutto, Abdul Waheed & Bazmi, Aqeel Ahmed & Zahedi, Gholamreza, 2013. "Greener energy: Issues and challenges for Pakistan—wind power prospective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 20(C), pages 519-538.
    10. Zhao, Zhen-Yu & Zhu, Jiang & Zuo, Jian, 2015. "Flexibility of wind power industry chain for environmental turbulence: A matching model study," Renewable Energy, Elsevier, vol. 83(C), pages 375-383.
    11. Pauline Lacour & Jean-Christophe Simon, 2012. "Les avancées du Mécanisme de Développement Propre : une étape décisive vers un développement "décarboné" au Sud ?," Post-Print halshs-00713067, HAL.
    12. Zhao, Zhen-yu & Yan, Hong & Zuo, Jian & Tian, Yu-xi & Zillante, George, 2013. "A critical review of factors affecting the wind power generation industry in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 499-508.
    13. Stua, Michele, 2013. "Evidence of the clean development mechanism impact on the Chinese electric power system's low-carbon transition," Energy Policy, Elsevier, vol. 62(C), pages 1309-1319.
    14. Jin, Xin & Zhang, Zhaolong & Shi, Xiaoqiang & Ju, Wenbin, 2014. "A review on wind power industry and corresponding insurance market in China: Current status and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 1069-1082.
    15. Zhao, Zhen-yu & Tian, Yu-xi & Zillante, George, 2014. "Modeling and evaluation of the wind power industry chain: A China study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 397-406.
    16. Gao, Xiaoxia & Yang, Hongxing & Lu, Lin, 2014. "Study on offshore wind power potential and wind farm optimization in Hong Kong," Applied Energy, Elsevier, vol. 130(C), pages 519-531.
    17. Jingbo Cui & Zhenxuan Wang & Haishan Yu, 2022. "Can International Climate Cooperation Induce Knowledge Spillover to Developing Countries? Evidence from CDM," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 923-951, August.
    18. Chen, Hao & Gao, Xin-Ya & Liu, Jian-Yu & Zhang, Qian & Yu, Shiwei & Kang, Jia-Ning & Yan, Rui & Wei, Yi-Ming, 2020. "The grid parity analysis of onshore wind power in China: A system cost perspective," Renewable Energy, Elsevier, vol. 148(C), pages 22-30.
    19. Li, X. & Hubacek, K. & Siu, Y.L., 2012. "Wind power in China – Dream or reality?," Energy, Elsevier, vol. 37(1), pages 51-60.
    20. Charikleia Karakosta, 2016. "A Holistic Approach for Addressing the Issue of Effective Technology Transfer in the Frame of Climate Change," Energies, MDPI, vol. 9(7), pages 1-20, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:69:y:2014:i:c:p:179-185. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.