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A system dynamics analysis of technology, cost and policy that affect the market competition of shale gas in China


  • Yunna, Wu
  • Kaifeng, Chen
  • Yisheng, Yang
  • Tiantian, Feng


In order to ease environment pressure and alleviate the scarce problem of energy, Chinese government has begun to exploit and develop shale gas (SG) since 2009. However, the formation of competitive market is bristled with difficulties, due to its infancy, imperfect and lack of standardization. This paper firstly analyzes the status quo of technology, policy, cost, and competition of SG industry in China. Then a system dynamics (SD) model is built to show various trends of Chinese SG industry under different scenarios, which shows that technology, policy and cost all have effects on competitiveness. At last, the simulations reveal that the number of competitors in Chinese SG industry will arrive at its peak from 2019 to 2020. The corresponding recommendations have been presented: Chinese government should pay more attention on the perfection of laws and regulations of SG industry. And competitors should focus on increasing R&D investment.

Suggested Citation

  • Yunna, Wu & Kaifeng, Chen & Yisheng, Yang & Tiantian, Feng, 2015. "A system dynamics analysis of technology, cost and policy that affect the market competition of shale gas in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 235-243.
  • Handle: RePEc:eee:rensus:v:45:y:2015:i:c:p:235-243
    DOI: 10.1016/j.rser.2015.01.060

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    References listed on IDEAS

    1. Xingang, Zhao & Jiaoli, Kang & Bei, Lan, 2013. "Focus on the development of shale gas in China—Based on SWOT analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 603-613.
    2. Movilla, Santiago & Miguel, Luis J. & Blázquez, L. Felipe, 2013. "A system dynamics approach for the photovoltaic energy market in Spain¤," Energy Policy, Elsevier, vol. 60(C), pages 142-154.
    3. Wang, Qiang & Chen, Xi & Jha, Awadhesh N. & Rogers, Howard, 2014. "Natural gas from shale formation – The evolution, evidences and challenges of shale gas revolution in United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 1-28.
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    5. Jenner, Steffen & Lamadrid, Alberto J., 2013. "Shale gas vs. coal: Policy implications from environmental impact comparisons of shale gas, conventional gas, and coal on air, water, and land in the United States," Energy Policy, Elsevier, vol. 53(C), pages 442-453.
    6. Hu, Desheng & Xu, Shengqing, 2013. "Opportunity, challenges and policy choices for China on the development of shale gas," Energy Policy, Elsevier, vol. 60(C), pages 21-26.
    7. Ansari, Nastaran & Seifi, Abbas, 2013. "A system dynamics model for analyzing energy consumption and CO2 emission in Iranian cement industry under various production and export scenarios," Energy Policy, Elsevier, vol. 58(C), pages 75-89.
    8. Chi, K.C. & Reiner, D.M. & Nuttall, W.J., 2009. "Dynamics of the UK Natural Gas Industry: System Dynamics Modelling and Long-Term Energy Policy Analysis," Cambridge Working Papers in Economics 0922, Faculty of Economics, University of Cambridge.
    9. Kiani, Behdad & Ali Pourfakhraei, Mohammad, 2010. "A system dynamic model for production and consumption policy in Iran oil and gas sector," Energy Policy, Elsevier, vol. 38(12), pages 7764-7774, December.
    10. Chen, Shangbin & Zhu, Yanming & Wang, Hongyan & Liu, Honglin & Wei, Wei & Fang, Junhua, 2011. "Shale gas reservoir characterisation: A typical case in the southern Sichuan Basin of China," Energy, Elsevier, vol. 36(11), pages 6609-6616.
    11. Casey, Thomas R. & Töyli, Juuso, 2012. "Mobile voice diffusion and service competition: A system dynamic analysis of regulatory policy," Telecommunications Policy, Elsevier, vol. 36(3), pages 162-174.
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    Cited by:

    1. Zhao, Rui & Zhou, Xiao & Han, Jiaojie & Liu, Chengliang, 2016. "For the sustainable performance of the carbon reduction labeling policies under an evolutionary game simulation," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 262-274.

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    Shale gas; China; System dynamics model; Competition;


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