IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v138y2020ics0301421519308079.html
   My bibliography  Save this article

Policy analysis for grid parity of wind power generation in China

Author

Listed:
  • Xu, Xiaomin
  • Niu, Dongxiao
  • Xiao, Bowen
  • Guo, Xiaodan
  • Zhang, Lihui
  • Wang, Keke

Abstract

The “13th Five-Year Plan” for wind power has proposed that it will reach grid parity and compete with power and hydropower. Accordingly, many doubts have been raised. Is the wind power in China already equipped with conditions for grid parity? What is the impact on the development of wind power? To solve these doubts, this study employs a system dynamics model to judge whether China can achieve grid parity for wind power. First, the factor indicator system is constructed from the aspects of wind power production, consumption, and curtailment. Second, the trend of wind power curtailment, cost, revenue, and installed capacity are predicted from 2005 to 2030. Third, three scenarios are set to simulate the impact of grid parity on wind power. Empirical results show that: (1) Net revenue and installed capacity will continue to increase, while the wind power curtailment will gradually reduce. (2) When the subsidy is decreased to 0, revenue will significantly reduce, and the installed capacity will reduce by nearly 1/4. (3) The Chinese government should not abolish all subsidies for wind power to achieve grid parity in 2020. To prompt the process for the grid parity of wind power, some policy implications are proposed.

Suggested Citation

  • Xu, Xiaomin & Niu, Dongxiao & Xiao, Bowen & Guo, Xiaodan & Zhang, Lihui & Wang, Keke, 2020. "Policy analysis for grid parity of wind power generation in China," Energy Policy, Elsevier, vol. 138(C).
    • Handle: RePEc:eee:enepol:v:138:y:2020:i:c:s0301421519308079
    DOI: 10.1016/j.enpol.2019.111225
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421519308079
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2019.111225?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. Yao, Xilong & Liu, Yang & Qu, Shiyou, 2015. "When will wind energy achieve grid parity in China? – Connecting technological learning and climate finance," Applied Energy, Elsevier, vol. 160(C), pages 697-704.
    2. Liu, Xue & Ma, Shoufeng & Tian, Junfang & Jia, Ning & Li, Geng, 2015. "A system dynamics approach to scenario analysis for urban passenger transport energy consumption and CO2 emissions: A case study of Beijing," Energy Policy, Elsevier, vol. 85(C), pages 253-270.
    3. Nguyen, Christy & Ma, Chunbo & Hailu, Atakelty & Chalak, Morteza, 2016. "Factors influencing calculation of capacity value of wind power: A case study of the Australian National Electricity Market (NEM)," Renewable Energy, Elsevier, vol. 90(C), pages 319-328.
    4. Feng, Tian-tian & Yang, Yi-sheng & Yang, Yu-heng, 2018. "What will happen to the power supply structure and CO2 emissions reduction when TGC meets CET in the electricity market in China?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 92(C), pages 121-132.
    5. Xia, Fang & Song, Feng, 2017. "Evaluating the economic impact of wind power development on local economies in China," Energy Policy, Elsevier, vol. 110(C), pages 263-270.
    6. Peter Kedron & Sharmistha Bagchi-Sen, 2018. "Explanations of firm survival in renewable energy in the United States: a study of ethanol refineries," European Planning Studies, Taylor & Francis Journals, vol. 26(11), pages 2237-2255, November.
    7. Cherp, Aleh & Vinichenko, Vadim & Jewell, Jessica & Suzuki, Masahiro & Antal, Miklós, 2017. "Comparing electricity transitions: A historical analysis of nuclear, wind and solar power in Germany and Japan," Energy Policy, Elsevier, vol. 101(C), pages 612-628.
    8. He, Y.X. & Jiao, J. & Chen, R.J. & Shu, H., 2018. "The optimization of Chinese power grid investment based on transmission and distribution tariff policy: A system dynamics approach," Energy Policy, Elsevier, vol. 113(C), pages 112-122.
    9. Hache, Emmanuel & Palle, Angélique, 2019. "Renewable energy source integration into power networks, research trends and policy implications: A bibliometric and research actors survey analysis," Energy Policy, Elsevier, vol. 124(C), pages 23-35.
    10. Aslani, Alireza & Helo, Petri & Naaranoja, Marja, 2014. "Role of renewable energy policies in energy dependency in Finland: System dynamics approach," Applied Energy, Elsevier, vol. 113(C), pages 758-765.
    11. Rosales-Asensio, Enrique & Borge-Diez, David & Blanes-Peiró, Jorge-Juan & Pérez-Hoyos, Ana & Comenar-Santos, Antonio, 2019. "Review of wind energy technology and associated market and economic conditions in Spain," Renewable and Sustainable Energy Reviews, Elsevier, vol. 101(C), pages 415-427.
    12. Hsu, Chiung-Wen, 2012. "Using a system dynamics model to assess the effects of capital subsidies and feed-in tariffs on solar PV installations," Applied Energy, Elsevier, vol. 100(C), pages 205-217.
    13. Lin, Boqiang & Omoju, Oluwasola E. & Okonkwo, Jennifer U., 2016. "Factors influencing renewable electricity consumption in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 687-696.
    14. Sharifian, Amir & Ghadi, M. Jabbari & Ghavidel, Sahand & Li, Li & Zhang, Jiangfeng, 2018. "A new method based on Type-2 fuzzy neural network for accurate wind power forecasting under uncertain data," Renewable Energy, Elsevier, vol. 120(C), pages 220-230.
    15. Wang, Xiaozhen & Zou, Honghui, 2018. "Study on the effect of wind power industry policy types on the innovation performance of different ownership enterprises: Evidence from China," Energy Policy, Elsevier, vol. 122(C), pages 241-252.
    16. Yang, Xiaolei & He, Lingyun & Xia, Yufei & Chen, Yufeng, 2019. "Effect of government subsidies on renewable energy investments: The threshold effect," Energy Policy, Elsevier, vol. 132(C), pages 156-166.
    17. Dariush Khezrimotlagh & Yao Chen, 2018. "The Optimization Approach," International Series in Operations Research & Management Science, in: Decision Making and Performance Evaluation Using Data Envelopment Analysis, chapter 0, pages 107-134, Springer.
    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. Wang, Yongli & Zhou, Minhan & Zhang, Fuli & Zhang, Yuli & Ma, Yuze & Dong, Huanran & Zhang, Danyang & Liu, Lin, 2021. "Chinese grid investment based on transmission and distribution tariff policy: An optimal coordination between capacity and demand," Energy, Elsevier, vol. 219(C).
    2. Hu, Yu & Chi, Yuanying & Zhao, Hao & Zhou, Wenbing, 2022. "The development of renewable energy industry under renewable portfolio standards: From the perspective of provincial resource differences," Energy Policy, Elsevier, vol. 170(C).
    3. Yu-Ling Hsiao, Cody & Sheng, Ni & Fu, Shenze & Wei, Xinyang, 2022. "Evaluation of contagious effects of China's wind power industrial policies," Energy, Elsevier, vol. 238(PB).
    4. Esmaieli, M. & Ahmadian, M., 2018. "The effect of research and development incentive on wind power investment, a system dynamics approach," Renewable Energy, Elsevier, vol. 126(C), pages 765-773.
    5. Wu, Jiansong & Zhang, Linlin & Bai, Yiping & Reniers, Genserik, 2022. "A safety investment optimization model for power grid enterprises based on System Dynamics and Bayesian network theory," Reliability Engineering and System Safety, Elsevier, vol. 221(C).
    6. Darya Pyatkina & Tamara Shcherbina & Vadim Samusenkov & Irina Razinkina & Mariusz Sroka, 2021. "Modeling and Management of Power Supply Enterprises’ Cash Flows," Energies, MDPI, vol. 14(4), pages 1-17, February.
    7. Liu, Dunnan & Xiao, Bowen, 2018. "Exploring the development of electric vehicles under policy incentives: A scenario-based system dynamics model," Energy Policy, Elsevier, vol. 120(C), pages 8-23.
    8. Ye, Rui-Ke & Gao, Zhuang-Fei & Fang, Kai & Liu, Kang-Li & Chen, Jia-Wei, 2021. "Moving from subsidy stimulation to endogenous development: A system dynamics analysis of China's NEVs in the post-subsidy era," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    9. Yu, Chin-Hsien & Wu, Xiuqin & Lee, Wen-Chieh & Zhao, Jinsong, 2021. "Resource misallocation in the Chinese wind power industry: The role of feed-in tariff policy," Energy Economics, Elsevier, vol. 98(C).
    10. Izzet Alp Gul & Gülgün Kayakutlu & M. Özgür Kayalica, 2020. "Risk Analysis in Renewable Energy System (RES) Investment for a Developing Country: A Case Study in Pakistan," Arthaniti: Journal of Economic Theory and Practice, , vol. 19(2), pages 204-223, December.
    11. Wu, Wei & Hu, Yingying & Wu, Qinwen, 2023. "Subsidies and tax incentives - Does it make a difference on TFP? Evidences from China's photovoltaic and wind listed companies," Renewable Energy, Elsevier, vol. 208(C), pages 645-656.
    12. Yilmaz, S. & Rinaldi, A. & Patel, M.K., 2020. "DSM interactions: What is the impact of appliance energy efficiency measures on the demand response (peak load management)?," Energy Policy, Elsevier, vol. 139(C).
    13. Lu, Xin & Qiu, Jing & Zhang, Cuo & Lei, Gang & Zhu, Jianguo, 2024. "Seizing unconventional arbitrage opportunities in virtual power plants: A profitable and flexible recruitment approach," Applied Energy, Elsevier, vol. 358(C).
    14. Lin, Boqiang & Chen, Yufang, 2019. "Impacts of policies on innovation in wind power technologies in China," Applied Energy, Elsevier, vol. 247(C), pages 682-691.
    15. Liu, Yang & Dong, Kangyin & Dong, Xiucheng & Taghizadeh-Hesary, Farhad, 2024. "Towards a sustainable electricity industry in China: An appraisal of the efficacy of environmental policies," Utilities Policy, Elsevier, vol. 86(C).
    16. Chai, Song & Liu, Qiyun & Yang, Jin, 2023. "Renewable power generation policies in China: Policy instrument choices and influencing factors from the central and local government perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 174(C).
    17. Dmitry Borisoglebsky & Liz Varga, 2019. "A Resilience Toolbox and Research Design for Black Sky Hazards to Power Grids," Complexity, Hindawi, vol. 2019, pages 1-15, June.
    18. Sen Guo & Wenyue Zhang & Xiao Gao, 2020. "Business Risk Evaluation of Electricity Retail Company in China Using a Hybrid MCDM Method," Sustainability, MDPI, vol. 12(5), pages 1-21, March.
    19. Ghazouani, Tarek, 2022. "Dynamic impact of globalization on renewable energy consumption: Non-parametric modelling evidence," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    20. Morcillo, José D. & Franco, Carlos J. & Angulo, Fabiola, 2018. "Simulation of demand growth scenarios in the Colombian electricity market: An integration of system dynamics and dynamic systems," Applied Energy, Elsevier, vol. 216(C), pages 504-520.

    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:enepol:v:138:y:2020:i:c:s0301421519308079. 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/locate/enpol .

    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.