Evolution of price policy for offshore wind energy in China: Trilemma of capacity, price and subsidy

Youzhou Wei, Qing-Ping Zou and Xianghong Lin

Renewable and Sustainable Energy Reviews, 2021, vol. 136, issue C

Abstract: China promotes the development of the offshore wind industry to reduce CO2 emissions, tackle air pollution, commit to the Paris Climate Agreement and develop a strategic emerging industry. The installed capacity of offshore wind power in China reached 4445 MW in 2018 which was ranked third in the world. Big developers dominated the offshore wind energy market with domestic turbines. Many projects are under construction. The offshore wind industry in China has experienced four stages of price policy: demonstration, concession, feed-in tariff and market-oriented competition policy. Nevertheless, it is impossible to expand the installed capacity, lower the on-grid price (cost) and reduce the subsidy for the offshore wind power industry at the same time. This is the trilemma (impossible trinity) that needs to be addressed by the price policy. In the past decade, China has implemented an evolving price policy, i.e., a system and mechanism that encourage firms to invest in the offshore wind industry to expand the capacity of the industry by setting price and providing subsidy and other benefits. An overall evaluation based on the indicators of installed capacity, price, subsidy, spatial distribution, technology and industrial linkage shows that the price policy has been effective in balancing capacity, price and subsidy up to now. However, lowering the price and reducing the subsidy will be the major challenges that China has to overcome in the coming years in order to sustain its current growth trend. To boost the development of its offshore wind industry further, China needs to implement a market-oriented competition price policy and mechanism, learn from the experience of price policy evolution in European countries and open the market to foreign investors.

Keywords: Offshore wind; Energy policy; Trilemma; Governance; Wind energy; Subsidy; Price policy; Wind power capacity; Marine economy; Blue economy; Low-carbon; Climate change (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1364032120306547
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:136:y:2021:i:c:s1364032120306547

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/bibliographic
http://www.elsevier. ... 600126/bibliographic

DOI: 10.1016/j.rser.2020.110366

Access Statistics for this article

Renewable and Sustainable Energy Reviews is currently edited by L. Kazmerski

More articles in Renewable and Sustainable Energy Reviews from Elsevier
Bibliographic data for series maintained by Catherine Liu ().