Electricity Market Reforms for Energy Transition: Lessons from China

Yuk Shing Cheng*, Man Kit Chung, Kam-Pui Tsang

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

3 Citations (Scopus)

Abstract

In response to the rising importance of the climate agenda, many countries have restructured their electricity markets to facilitate the utilization of renewable energy. China is an interesting case because it has expanded its utilization of wind and solar energy with unmatched speed. This review starts with an analysis of the 2002 reforms that uncoupled electricity production from transmission. The investigation covers the period leading up to the 2022 proposal, which aimed to build a nationally integrated electricity market. The analysis suggests that a careful alignment of incentives for key market players to produce and consume renewable energy is vital during the process of energy transition. The introduction of feed-in tariffs in 2009 for wind energy, which were subsequently extended to solar energy, stimulated a high growth in installed capacity. However, a high electricity curtailment rate resulted. Since 2018, the Chinese government has resorted to curtailment caps and renewable portfolio standards to increase the utilization of renewable electricity. After the announcement of the “dual carbon goals” in 2020, the Chinese government launched a series of reforms that aimed to nurture growth in the green electricity market and the formation of a nationally integrated electricity market. The removal of interregional trade barriers is a key element of China’s current electricity market reforms and will be crucial to determining whether China can achieve its climate goals.
Original languageEnglish
Article number905
Number of pages16
JournalEnergies
Volume16
Issue number2
DOIs
Publication statusPublished - 13 Jan 2023

Scopus Subject Areas

  • Control and Optimization
  • Energy (miscellaneous)
  • Engineering (miscellaneous)
  • Energy Engineering and Power Technology
  • Electrical and Electronic Engineering
  • Building and Construction
  • Fuel Technology
  • Renewable Energy, Sustainability and the Environment

User-Defined Keywords

  • China
  • electricity market
  • feed-in tariff
  • renewable energy
  • renewable portfolio standard
  • solar PV
  • wind

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