China's wind industry: policy lessons for domestic government interventions and international support

Xiliang Zhang, Shiyan Chang, Molin Huo and Ruoshui Wang

Climate Policy, 2009, vol. 9, issue 5, 553-564

Abstract: The dynamics of the development of China's wind power industry were investigated from a dual perspective of domestic government interventions and international support. The progress of China's wind power industry is largely attributed both to the effective implementation of a bundle of domestic public policies (such as the wind power concession programme, mandatory renewable power market share, power surcharge for renewables, and tax relief) and international support (in the forms of technology transfer, CDM and public finance support). Wind power has great potential for mitigating China's future CO 2 emissions. However, resource uncertainty, technology risk, and market uncertainty will need to be addressed in order to translate the potential into market reality. Enhancing domestic technology R&D support, increasing the level of the power surcharge for renewables, international support (e.g. CDM), and improving technology transfer will assist in minimizing these uncertainties and risks. Policy relevance: International technological cooperation is illustrated in terms of how domestic policy and international support interact through constructive domestic policies, private-sector joint ventures, and international capacity building and financial support. The definition of a new objective for future policy (large-scale penetration of wind in the Chinese power system) allows for the identification of future priorities for technology cooperation. Large amounts of intermittent generation require new technologies and practices for grid operation and management, and better adaptation of turbine design to domestic materials and local conditions. Win-win options exist, but need to be supported by capacity building and frameworks that balance incentives for international technology companies against Chinese concerns over dependence on imported technology and high licensing fees.

Date: 2009
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Citations: View citations in EconPapers (16)

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DOI: 10.3763/cpol.2009.0641

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