IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v105y2013icp423-429.html
   My bibliography  Save this article

What moves wind energy development in China? Show me the money!

Author

Listed:
  • Lam, J.C.K.
  • Woo, C.K.
  • Kahrl, F.
  • Yu, W.K.

Abstract

China’s wind industry has grown rapidly over the past decade. Continued growth in this industry is critical for China’s domestic energy security and the global environment. However, little is known about the microeconomic drivers that move wind energy development in China. Based on a survey of experts in Mainland China and Hong Kong Special Administrative Region, this paper finds that the most important drivers of wind energy investment in China are perceived to be those that can have an immediate impact on a wind energy developer’s cash flow: government financial assistance, easy and inexpensive transmission access, wind energy cost decline, and a high feed-in-tariff. A renewable portfolio standard, tax incentives and international research and development cooperation are seen as less important. These findings underscore the importance of reducing the financial risk in wind energy development. However, none of the key drivers is directly tied to energy output, which suggests that China’s wind energy policies must be modified to incentivize energy output, rather than just installed capacity.

Suggested Citation

  • Lam, J.C.K. & Woo, C.K. & Kahrl, F. & Yu, W.K., 2013. "What moves wind energy development in China? Show me the money!," Applied Energy, Elsevier, vol. 105(C), pages 423-429.
  • Handle: RePEc:eee:appene:v:105:y:2013:i:c:p:423-429
    DOI: 10.1016/j.apenergy.2012.11.067
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261912008720
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.apenergy.2012.11.067?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yuan, Jia-Hai & Kang, Jian-Gang & Zhao, Chang-Hong & Hu, Zhao-Guang, 2008. "Energy consumption and economic growth: Evidence from China at both aggregated and disaggregated levels," Energy Economics, Elsevier, vol. 30(6), pages 3077-3094, November.
    2. Richard Green & Adonis Yatchew, 2012. "Support Schemes for Renewable Energy: An Economic Analysis," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    3. Shiu, Alice & Lam, Pun-Lee, 2004. "Electricity consumption and economic growth in China," Energy Policy, Elsevier, vol. 32(1), pages 47-54, January.
    4. Liu, Wen & Lund, Henrik & Mathiesen, Brian Vad, 2011. "Large-scale integration of wind power into the existing Chinese energy system," Energy, Elsevier, vol. 36(8), pages 4753-4760.
    5. Ozturk, Ilhan & Aslan, Alper & Kalyoncu, Huseyin, 2010. "Energy consumption and economic growth relationship: Evidence from panel data for low and middle income countries," Energy Policy, Elsevier, vol. 38(8), pages 4422-4428, August.
    6. Wang, Qiang & Chen, Yong, 2010. "Barriers and opportunities of using the clean development mechanism to advance renewable energy development in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(7), pages 1989-1998, September.
    7. Ling, Yu & Cai, Xu, 2012. "Exploitation and utilization of the wind power and its perspective in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 2111-2117.
    8. Liu, Yingqi & Kokko, Ari, 2010. "Wind power in China: Policy and development challenges," Energy Policy, Elsevier, vol. 38(10), pages 5520-5529, October.
    9. Zhao, Zhen Yu & Hu, Ji & Zuo, Jian, 2009. "Performance of wind power industry development in China: A DiamondModel study," Renewable Energy, Elsevier, vol. 34(12), pages 2883-2891.
    10. Lew, Debra J., 2000. "Alternatives to coal and candles: wind power in China," Energy Policy, Elsevier, vol. 28(4), pages 271-286, April.
    11. Yatchew, Adonis & Baziliauskas, Andy, 2011. "Ontario feed-in-tariff programs," Energy Policy, Elsevier, vol. 39(7), pages 3885-3893, July.
    12. Reuter, Wolf Heinrich & Szolgayová, Jana & Fuss, Sabine & Obersteiner, Michael, 2012. "Renewable energy investment: Policy and market impacts," Applied Energy, Elsevier, vol. 97(C), pages 249-254.
    13. Han, Jingyi & Mol, Arthur P.J. & Lu, Yonglong & Zhang, Lei, 2009. "Onshore wind power development in China: Challenges behind a successful story," Energy Policy, Elsevier, vol. 37(8), pages 2941-2951, August.
    14. Zhao, Xiaoli & Zhang, Sufang & Yang, Rui & Wang, Mei, 2012. "Constraints on the effective utilization of wind power in China: An illustration from the northeast China grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4508-4514.
    15. Yuan, Chaoqing & Liu, Sifeng & Fang, Zhigeng & Xie, Naiming, 2010. "The relation between Chinese economic development and energy consumption in the different periods," Energy Policy, Elsevier, vol. 38(9), pages 5189-5198, September.
    16. Yuan, Jiahai & Zhao, Changhong & Yu, Shunkun & Hu, Zhaoguang, 2007. "Electricity consumption and economic growth in China: Cointegration and co-feature analysis," Energy Economics, Elsevier, vol. 29(6), pages 1179-1191, November.
    17. Yang, Mian & Patiño-Echeverri, Dalia & Yang, Fuxia, 2012. "Wind power generation in China: Understanding the mismatch between capacity and generation," Renewable Energy, Elsevier, vol. 41(C), pages 145-151.
    18. Junfeng, Li & Wan, Yih-huei & Ohi, James M., 1997. "Renewable energy development in China: Resource assessment, technology status, and greenhouse gas mitigation potential," Applied Energy, Elsevier, vol. 56(3-4), pages 381-394, March.
    19. Zhou, Yuanchun & Zhang, Bing & Zou, Ji & Bi, Jun & Wang, Ke, 2012. "Joint R&D in low-carbon technology development in China: A case study of the wind-turbine manufacturing industry," Energy Policy, Elsevier, vol. 46(C), pages 100-108.
    20. Lewis, Joanna I. & Wiser, Ryan H., 2007. "Fostering a renewable energy technology industry: An international comparison of wind industry policy support mechanisms," Energy Policy, Elsevier, vol. 35(3), pages 1844-1857, March.
    21. Peidong, Zhang & Yanli, Yang & jin, Shi & Yonghong, Zheng & Lisheng, Wang & Xinrong, Li, 2009. "Opportunities and challenges for renewable energy policy in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(2), pages 439-449, February.
    22. Lema, Adrian & Ruby, Kristian, 2007. "Between fragmented authoritarianism and policy coordination: Creating a Chinese market for wind energy," Energy Policy, Elsevier, vol. 35(7), pages 3879-3890, July.
    23. Xu, Jianzhong & He, Dexin & Zhao, Xiaolu, 2010. "Status and prospects of Chinese wind energy," Energy, Elsevier, vol. 35(11), pages 4439-4444.
    24. Qiu, Yueming & Anadon, Laura D., 2012. "The price of wind power in China during its expansion: Technology adoption, learning-by-doing, economies of scale, and manufacturing localization," Energy Economics, Elsevier, vol. 34(3), pages 772-785.
    25. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
    26. Yu, Xiao & Qu, Hang, 2010. "Wind power in China--Opportunity goes with challenge," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(8), pages 2232-2237, October.
    27. Kang, Junjie & Yuan, Jiahai & Hu, Zhaoguang & Xu, Yan, 2012. "Review on wind power development and relevant policies in China during the 11th Five-Year-Plan period," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 1907-1915.
    28. Liu, Wen & Lund, Henrik & Mathiesen, Brian Vad & Zhang, Xiliang, 2011. "Potential of renewable energy systems in China," Applied Energy, Elsevier, vol. 88(2), pages 518-525, February.
    29. Zhao, Zhen-yu & Ling, Wen-jun & Zillante, George & Zuo, Jian, 2012. "Comparative assessment of performance of foreign and local wind turbine manufacturers in China," Renewable Energy, Elsevier, vol. 39(1), pages 424-432.
    30. Wang, Qiang, 2010. "Effective policies for renewable energy--the example of China's wind power--lessons for China's photovoltaic power," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(2), pages 702-712, February.
    31. Mitchell, C. & Bauknecht, D. & Connor, P.M., 2006. "Effectiveness through risk reduction: a comparison of the renewable obligation in England and Wales and the feed-in system in Germany," Energy Policy, Elsevier, vol. 34(3), pages 297-305, February.
    32. Li, Cun-bin & Lu, Gong-shu & Wu, Si, 2013. "The investment risk analysis of wind power project in China," Renewable Energy, Elsevier, vol. 50(C), pages 481-487.
    33. Liu, Wen-Qiang & Gan, Lin & Zhang, Xi-Liang, 2002. "Cost-competitive incentives for wind energy development in China: institutional dynamics and policy changes," Energy Policy, Elsevier, vol. 30(9), pages 753-765, July.
    34. Ho, Chun-Yu & Siu, Kam Wing, 2007. "A dynamic equilibrium of electricity consumption and GDP in Hong Kong: An empirical investigation," Energy Policy, Elsevier, vol. 35(4), pages 2507-2513, April.
    35. Yang, Ming & Nguyen, François & De T'Serclaes, Philippine & Buchner, Barbara, 2010. "Wind farm investment risks under uncertain CDM benefit in China," Energy Policy, Elsevier, vol. 38(3), pages 1436-1447, March.
    36. Yu, Dayang & Zhang, Bo & Liang, Jun & Han, Xueshan, 2011. "The influence of generation mix on the wind integrating capability of North China power grids: A modeling interpretation and potential solutions," Energy Policy, Elsevier, vol. 39(11), pages 7455-7463.
    37. Alagappan, L. & Orans, R. & Woo, C.K., 2011. "What drives renewable energy development?," Energy Policy, Elsevier, vol. 39(9), pages 5099-5104, September.
    38. Liao, Cuiping & Jochem, Eberhard & Zhang, Yi & Farid, Nida R., 2010. "Wind power development and policies in China," Renewable Energy, Elsevier, vol. 35(9), pages 1879-1886.
    39. Luo, Guo-liang & Zhi, Fei & Zhang, Xinying, 2012. "Inconsistencies between China's wind power development and grid planning: An institutional perspective," Renewable Energy, Elsevier, vol. 48(C), pages 52-56.
    40. Li, X. & Hubacek, K. & Siu, Y.L., 2012. "Wind power in China – Dream or reality?," Energy, Elsevier, vol. 37(1), pages 51-60.
    41. Zarnikau, Jay, 2011. "Successful renewable energy development in a competitive electricity market: A Texas case study," Energy Policy, Elsevier, vol. 39(7), pages 3906-3913, July.
    42. Li, Jun, 2010. "Decarbonising power generation in China--Is the answer blowing in the wind?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(4), pages 1154-1171, May.
    43. Zhao, Xiaoli & Wang, Feng & Wang, Mei, 2012. "Large-scale utilization of wind power in China: Obstacles of conflict between market and planning," Energy Policy, Elsevier, vol. 48(C), pages 222-232.
    Full references (including those not matched with items on IDEAS)

    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. Woo, C.K. & Sreedharan, P. & Hargreaves, J. & Kahrl, F. & Wang, J. & Horowitz, I., 2014. "A review of electricity product differentiation," Applied Energy, Elsevier, vol. 114(C), pages 262-272.
    2. Li, X. & Hubacek, K. & Siu, Y.L., 2012. "Wind power in China – Dream or reality?," Energy, Elsevier, vol. 37(1), pages 51-60.
    3. Zhao, Zhen-yu & Sun, Guang-zheng & Zuo, Jian & Zillante, George, 2013. "The impact of international forces on the Chinese wind power industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 131-141.
    4. Li, Cun-bin & Li, Peng & Feng, Xia, 2014. "Analysis of wind power generation operation management risk in China," Renewable Energy, Elsevier, vol. 64(C), pages 266-275.
    5. Liu, Xuemei, 2013. "The value of holding scarce wind resource—A cause of overinvestment in wind power capacity in China," Energy Policy, Elsevier, vol. 63(C), pages 97-100.
    6. Zhao, Xiaoli & Zhang, Sufang & Yang, Rui & Wang, Mei, 2012. "Constraints on the effective utilization of wind power in China: An illustration from the northeast China grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4508-4514.
    7. Yuan, Jiahai & Sun, Shenghui & Shen, Jiakun & Xu, Yan & Zhao, Changhong, 2014. "Wind power supply chain in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 356-369.
    8. Zhang, Sufang & Andrews-Speed, Philip & Zhao, Xiaoli, 2013. "Political and institutional analysis of the successes and failures of China’s wind power policy," Energy Policy, Elsevier, vol. 56(C), pages 331-340.
    9. Xuemei Liu, 2016. "Why Has Wind Power Capacity Been Overinvested Under Uncertainty in China?," Review of Economics & Finance, Better Advances Press, Canada, vol. 6, pages 1-12, February.
    10. 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.
    11. Zhao, Xiaoli & Wang, Feng & Wang, Mei, 2012. "Large-scale utilization of wind power in China: Obstacles of conflict between market and planning," Energy Policy, Elsevier, vol. 48(C), pages 222-232.
    12. Zifa Liu & Wenhua Zhang & Changhong Zhao & Jiahai Yuan, 2015. "The Economics of Wind Power in China and Policy Implications," Energies, MDPI, vol. 8(2), pages 1-18, February.
    13. Zhou, Yuanchun & Zhang, Bing & Zou, Ji & Bi, Jun & Wang, Ke, 2012. "Joint R&D in low-carbon technology development in China: A case study of the wind-turbine manufacturing industry," Energy Policy, Elsevier, vol. 46(C), pages 100-108.
    14. Gosens, Jorrit & Lu, Yonglong, 2014. "Prospects for global market expansion of China’s wind turbine manufacturing industry," Energy Policy, Elsevier, vol. 67(C), pages 301-318.
    15. Li, Jun, 2010. "Decarbonising power generation in China--Is the answer blowing in the wind?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(4), pages 1154-1171, May.
    16. Klagge, Britta & Liu, Zhigao & Campos Silva, Pedro, 2012. "Constructing China’s wind energy innovation system," Energy Policy, Elsevier, vol. 50(C), pages 370-382.
    17. Bao, Chao & Fang, Chuang-lin, 2013. "Geographical and environmental perspectives for the sustainable development of renewable energy in urbanizing China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 464-474.
    18. Zhao, Zhen-Yu & Chang, Rui-Dong & Chen, Yu-Long, 2016. "What hinder the further development of wind power in China?—A socio-technical barrier study," Energy Policy, Elsevier, vol. 88(C), pages 465-476.
    19. Zhao, Xiaoli & Zhang, Sufang & Zou, Yasheng & Yao, Jin, 2013. "To what extent does wind power deployment affect vested interests? A case study of the Northeast China Grid," Energy Policy, Elsevier, vol. 63(C), pages 814-822.
    20. Zhao, Zhen-yu & Yan, Hong & Zuo, Jian & Tian, Yu-xi & Zillante, George, 2013. "A critical review of factors affecting the wind power generation industry in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 499-508.

    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:eee:appene:v:105:y:2013:i:c:p:423-429. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    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.