Economic Assessment and Policy Analysis on Wind Energy Development in China

Changyi Liu (), Rong Zhu () and Yang Wang
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Changyi Liu: Global Energy Interconnection Development and Cooperation Organization, No. 8, Xuanwumennei Street, Xicheng District, Beijing 100031, China
Rong Zhu: National Climate Center, No. 46, Zhongguancun Nandajie, Haidian District, Beijing 100081, China
Yang Wang: National Climate Center, No. 46, Zhongguancun Nandajie, Haidian District, Beijing 100081, China

Chinese Journal of Urban and Environmental Studies (CJUES), 2017, vol. 05, issue 04, 1-17

Abstract: Considering rapid development and emerging new challenges of China's wind energy development, this paper summarizes and analyzes five critical problems. First, according to an economic potential assessment, if the feed-in tariff is set 0.60 Yuan/kWh, the economic potential of wind electricity of China will reach 6.63PWh, it could meet as much as 2/3 of total power demand by 2030, thus the targeted wind power proportion in future high renewable energy penetration can be achieved. Second, wind energy is abundant but little consumed in Northwest, Northeast and North China while it is insufficient in South and East of China, where grid-connection condition is well. Due to this reverse distribution pattern of wind power endowment and consumption in China, grid-connection transmission must be strengthened in the future, particularly the West–East and North–South power transmission projects must be pushed forward. Third, to address the issue of increasing wind energy curtailment in Northeast, Northwest and North China, stimulating local consumption of wind power by multiple ways is a possible solution in the short term, however, in the medium and long run, it is necessary to accelerate the construction of Ultra-High Voltage power grid in order to expand power transmission to other provinces and regions. Fourth, a new electricity market mechanism should be established as the fundamental measure of promoting new energy development, while green certificate trading market and carbon trading market will form the basis for such market mechanism in the long run. Fifth, though wind power development can bring multiple benefits to economy, employment, and environment, large-scale wind power development will, to some extent, affect local and regional climate. As global warming continues, the wind power resource distribution of China and the world may experience significant changes.

Keywords: Wind energy; economic potential; wind energy curtailment; green certificate trading; climate change (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1142/S2345748117500269

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