IDEAS home Printed from https://ideas.repec.org/p/qld/uq2004/562.html
   My bibliography  Save this paper

Regulatory Incentives for a Low-Carbon Electricity Sector in China

Author

Listed:
  • Flavio Menezes

    (School of Economics, University of Queensland)

  • Xuemei Zhang

    (School of Economics, Southwestern University of Finance and Economics)

Abstract

This paper reviews the incentives for pursuing a low-carbon electricity sector that are embedded in China’s regulatory and policy framework. To do so, we first describe the industry structure and the regulatory framework. Second, we explicitly review the policies that were developed to promote energy efficiency and renewable energy. These policies range from the introduction of legal requirements to undertake particular actions to pricing mechanism and financial incentives. The paper reviews evidence that the various programs designed to replace less efficient with more efficient power generation units have already produced impressive results. In addition, there has been steady progress in reducing line losses. Thus, supply-side energy efficient initiatives have been, at least, moderately successful. In contrast, we show that demand-side energy efficiency initiatives seem to have gone nowhere. Finally, we tease out the challenges faced by a sector governed by a myriad of complex arrangements, different institutions and agents who face different and often conflicting incentives for pursuing environmental and energy efficiency objectives.

Suggested Citation

  • Flavio Menezes & Xuemei Zhang, 2016. "Regulatory Incentives for a Low-Carbon Electricity Sector in China," Discussion Papers Series 562, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:562
    as

    Download full text from publisher

    File URL: https://economics.uq.edu.au/files/46150/562.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sun, Chuanwang & Zhu, Xiting, 2014. "Evaluating the public perceptions of nuclear power in China: Evidence from a contingent valuation survey," Energy Policy, Elsevier, vol. 69(C), pages 397-405.
    2. Teng, Fei & Wang, Xin & Zhiqiang, LV, 2014. "Introducing the emissions trading system to China’s electricity sector: Challenges and opportunities," Energy Policy, Elsevier, vol. 75(C), pages 39-45.
    3. Hong, Lixuan & Zhou, Nan & Fridley, David & Raczkowski, Chris, 2013. "Assessment of China's renewable energy contribution during the 12th Five Year Plan," Energy Policy, Elsevier, vol. 62(C), pages 1533-1543.
    4. He, Guizhen & Mol, Arthur P.J. & Zhang, Lei & Lu, Yonglong, 2013. "Public participation and trust in nuclear power development in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 1-11.
    5. Cherni, Judith A. & Kentish, Joanna, 2007. "Renewable energy policy and electricity market reforms in China," Energy Policy, Elsevier, vol. 35(7), pages 3616-3629, July.
    6. Lin, Boqiang & Jiang, Zhujun, 2011. "Estimates of energy subsidies in China and impact of energy subsidy reform," Energy Economics, Elsevier, vol. 33(2), pages 273-283, March.
    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.
    8. Zhou, Zhaoqiu & Yin, Xiuli & Xu, Jie & Ma, Longlong, 2012. "The development situation of biomass gasification power generation in China," Energy Policy, Elsevier, vol. 51(C), pages 52-57.
    9. Chang, Yen-Chiang & Wang, Nannan, 2010. "Environmental regulations and emissions trading in China," Energy Policy, Elsevier, vol. 38(7), pages 3356-3364, July.
    10. Christopher M. Dent, 2015. "China's renewable energy development: policy, industry and business perspectives," Asia Pacific Business Review, Taylor & Francis Journals, vol. 21(1), pages 26-43, January.
    11. Joisa Dutra, Flavio M. Menezes, and Xuemei Zheng, 2016. "Price Regulation and the Incentives to Pursue Energy Efficiency by Minimizing Network Losses," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    12. Kahrl, Fredrich & Williams, Jim & Jianhua, Ding & Junfeng, Hu, 2011. "Challenges to China's transition to a low carbon electricity system," Energy Policy, Elsevier, vol. 39(7), pages 4032-4041, July.
    13. Yu, Yongzhen, 2012. "How to fit demand side management (DSM) into current Chinese electricity system reform?," Energy Economics, Elsevier, vol. 34(2), pages 549-557.
    14. He, Y.X. & Yang, L.F. & He, H.Y. & Luo, T. & Wang, Y.J., 2011. "Electricity demand price elasticity in China based on computable general equilibrium model analysis," Energy, Elsevier, vol. 36(2), pages 1115-1123.
    15. Liu, Jicheng & Wang, Sijia & Wei, Qiushuang & Yan, Suli, 2014. "Present situation, problems and solutions of China׳s biomass power generation industry," Energy Policy, Elsevier, vol. 70(C), pages 144-151.
    16. Yuzhe Wang & Jing Zhao & Cheryl S.F. Chi, 2014. "China's Energy Reduction Policy System: Outcomes and Responses of Local Governments," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 22(3), pages 56-78, July.
    17. Kat Cheung, 2011. "Integration of Renewables: Status and Challenges in China," IEA Energy Papers 2011/9, OECD Publishing.
    18. Dong, Jun & Zhang, Xu & Xu, Xiaolin, 2012. "Techno-economic assessment and policy of gas power generation considering the role of multiple stakeholders in China," Energy Policy, Elsevier, vol. 48(C), pages 209-221.
    19. Price, Lynn & Wang, Xuejun & Yun, Jiang, 2010. "The challenge of reducing energy consumption of the Top-1000 largest industrial enterprises in China," Energy Policy, Elsevier, vol. 38(11), pages 6485-6498, November.
    20. Kahrl, Fredrich & Williams, James H. & Hu, Junfeng, 2013. "The political economy of electricity dispatch reform in China," Energy Policy, Elsevier, vol. 53(C), pages 361-369.
    21. Li, Li & Tan, Zhongfu & Wang, Jianhui & Xu, Jun & Cai, Chengkai & Hou, Yong, 2011. "Energy conservation and emission reduction policies for the electric power industry in China," Energy Policy, Elsevier, vol. 39(6), pages 3669-3679, June.
    22. 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.
    23. Price, Lynn & Levine, Mark D. & Zhou, Nan & Fridley, David & Aden, Nathaniel & Lu, Hongyou & McNeil, Michael & Zheng, Nina & Qin, Yining & Yowargana, Ping, 2011. "Assessment of China's energy-saving and emission-reduction accomplishments and opportunities during the 11th Five Year Plan," Energy Policy, Elsevier, vol. 39(4), pages 2165-2178, April.
    24. Ming, Zeng & Song, Xue & Mingjuan, Ma & Lingyun, Li & Min, Cheng & Yuejin, Wang, 2013. "Historical review of demand side management in China: Management content, operation mode, results assessment and relative incentives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 470-482.
    25. Ma, Chunbo & Zhao, Xiaoli, 2015. "China's electricity market restructuring and technology mandates: Plant-level evidence for changing operational efficiency," Energy Economics, Elsevier, vol. 47(C), pages 227-237.
    26. Zhang, Sufang & He, Yongxiu, 2013. "Analysis on the development and policy of solar PV power in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 393-401.
    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. Duojiao Tan & Bilal & Simon Gao & Bushra Komal, 2020. "Impact of Carbon Emission Trading System Participation and Level of Internal Control on Quality of Carbon Emission Disclosures: Insights from Chinese State-Owned Electricity Companies," Sustainability, MDPI, vol. 12(5), pages 1-14, February.
    2. Cheng, Chuntian & Chen, Fu & Li, Gang & Ristić, Bora & Mirchi, Ali & Qiyu, Tu & Madani, Kaveh, 2018. "Reform and renewables in China: The architecture of Yunnan's hydropower dominated electricity market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 682-693.
    3. Tomas Baležentis & Dalia Štreimikienė, 2019. "Sustainability in the Electricity Sector through Advanced Technologies: Energy Mix Transition and Smart Grid Technology in China," Energies, MDPI, vol. 12(6), pages 1-21, March.
    4. Jin, Jingliang & Zhou, Peng & Li, Chenyu & Guo, Xiaojun & Zhang, Mingming, 2019. "Low-carbon power dispatch with wind power based on carbon trading mechanism," Energy, Elsevier, vol. 170(C), pages 250-260.
    5. Shi-Yi Song & Hong Leng, 2020. "Modeling the Household Electricity Usage Behavior and Energy-Saving Management in Severely Cold Regions," Energies, MDPI, vol. 13(21), pages 1-22, October.

    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. Lo, Kevin, 2014. "A critical review of China's rapidly developing renewable energy and energy efficiency policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 508-516.
    2. Zhang, Yin-Fang & Gao, Ping, 2016. "Integrating environmental considerations into economic regulation of China's electricity sector," Utilities Policy, Elsevier, vol. 38(C), pages 62-71.
    3. Li, Mingquan & Patiño-Echeverri, Dalia & Zhang, Junfeng (Jim), 2019. "Policies to promote energy efficiency and air emissions reductions in China's electric power generation sector during the 11th and 12th five-year plan periods: Achievements, remaining challenges, and ," Energy Policy, Elsevier, vol. 125(C), pages 429-444.
    4. Guo, Peiyang & Li, Victor O.K. & Lam, Jacqueline C.K., 2017. "Smart demand response in China: Challenges and drivers," Energy Policy, Elsevier, vol. 107(C), pages 1-10.
    5. Khanna, Nina Zheng & Zhou, Nan & Fridley, David & Ke, Jing, 2016. "Quantifying the potential impacts of China's power-sector policies on coal input and CO2 emissions through 2050: A bottom-up perspective," Utilities Policy, Elsevier, vol. 41(C), pages 128-138.
    6. Zhou, Kaile & Yang, Shanlin, 2015. "Demand side management in China: The context of China’s power industry reform," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 954-965.
    7. 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.
    8. Schreifels, Jeremy J. & Fu, Yale & Wilson, Elizabeth J., 2012. "Sulfur dioxide control in China: policy evolution during the 10th and 11th Five-year Plans and lessons for the future," Energy Policy, Elsevier, vol. 48(C), pages 779-789.
    9. Wang, Qiang & Chen, Xi, 2015. "Energy policies for managing China’s carbon emission," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 470-479.
    10. 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.
    11. Kayser, Dirk, 2016. "Solar photovoltaic projects in China: High investment risks and the need for institutional response," Applied Energy, Elsevier, vol. 174(C), pages 144-152.
    12. Chen, Hao & Geng, Hao-Peng & Ling, Hui-Ting & Peng, Song & Li, Nan & Yu, Shiwei & Wei, Yi-Ming, 2020. "Modeling the coal-to-gas switch potentials in the power sector: A case study of China," Energy, Elsevier, vol. 192(C).
    13. Zhou, Kaile & Yang, Shanlin & Shen, Chao & Ding, Shuai & Sun, Chaoping, 2015. "Energy conservation and emission reduction of China’s electric power industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 10-19.
    14. Betz, Joachim, 2013. "The Reform of China's Energy Policies," GIGA Working Papers 216, GIGA German Institute of Global and Area Studies.
    15. Tomas Baležentis & Dalia Štreimikienė, 2019. "Sustainability in the Electricity Sector through Advanced Technologies: Energy Mix Transition and Smart Grid Technology in China," Energies, MDPI, vol. 12(6), pages 1-21, March.
    16. Du, Gang & Sun, Chuanwang & Fang, Zhongnan, 2015. "Evaluating the Atkinson index of household energy consumption in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 1080-1087.
    17. Li, Ying & Lukszo, Zofia & Weijnen, Margot, 2015. "The implications of CO2 price for China’s power sector decarbonization," Applied Energy, Elsevier, vol. 146(C), pages 53-64.
    18. Peng Ou & Ruting Huang & Xin Yao, 2016. "Economic Impacts of Power Shortage," Sustainability, MDPI, vol. 8(7), pages 1-21, July.
    19. Wei, Yi-Ming & Chen, Hao & Chyong, Chi Kong & Kang, Jia-Ning & Liao, Hua & Tang, Bao-Jun, 2018. "Economic dispatch savings in the coal-fired power sector: An empirical study of China," Energy Economics, Elsevier, vol. 74(C), pages 330-342.
    20. Mian Yang & Zheng Hu & Jiahai Yuan, 2016. "The recent history and successes of China's energy efficiency policy," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 5(6), pages 715-730, November.

    More about this item

    Keywords

    Regulatory Incentives; Energy Efficiency; Renewable Energy; Electricity Sector;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:qld:uq2004:562. 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: SOE IT (email available below). General contact details of provider: https://edirc.repec.org/data/decuqau.html .

    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.