TY - JOUR
T1 - Evolution of price policy for offshore wind energy in China
T2 - Trilemma of capacity, price and subsidy
AU - Wei, Youzhou
AU - Zou, Qing-Ping
AU - Lin, Xianghong
N1 - Funding Information:
Here, the Installed capacity represents the size of the offshore wind power industry. The Price is the on-grid price (cost) that offshore wind power developers should be paid. The Subsidy is the financial support that developers receive from governments and/or public funds such as the National Renewable Energy Fund (NREF) of China. The i nstalled capacity , price and subsidy are the three best indicators of the status quo of the offshore wind power industry and the effectiveness of offshore wind price policy.
Funding Information:
The authors would like to thank the financial supports from China Scholarship Council (CSC) Fund (No. 201804180026 ) for the first author, Dr. Youzhou Wei to visit the second author, Prof. Qingping Zou, for one year at Heriot Watt University and the support from Shanghai Social Science Fund (No. 2020BJB025 ). The second author was supported by NERC grant NE/E0002129/1 previously. The authors would also like to thank Dr. Pam Prescott for the English language editing at the final stage of second revision.
Publisher Copyright:
© 2020 The Authors
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2021/2
Y1 - 2021/2
N2 - China promotes the development of the offshore wind industry to reduce CO2 emissions, tackle air pollution, commit to the Paris Climate Agreement and develop a strategic emerging industry. The installed capacity of offshore wind power in China reached 4445 MW in 2018 which was ranked third in the world. Big developers dominated the offshore wind energy market with domestic turbines. Many projects are under construction. The offshore wind industry in China has experienced four stages of price policy: demonstration, concession, feed-in tariff and market-oriented competition policy. Nevertheless, it is impossible to expand the installed capacity, lower the on-grid price (cost) and reduce the subsidy for the offshore wind power industry at the same time. This is the trilemma (impossible trinity) that needs to be addressed by the price policy. In the past decade, China has implemented an evolving price policy, i.e., a system and mechanism that encourage firms to invest in the offshore wind industry to expand the capacity of the industry by setting price and providing subsidy and other benefits. An overall evaluation based on the indicators of installed capacity, price, subsidy, spatial distribution, technology and industrial linkage shows that the price policy has been effective in balancing capacity, price and subsidy up to now. However, lowering the price and reducing the subsidy will be the major challenges that China has to overcome in the coming years in order to sustain its current growth trend. To boost the development of its offshore wind industry further, China needs to implement a market-oriented competition price policy and mechanism, learn from the experience of price policy evolution in European countries and open the market to foreign investors.
AB - China promotes the development of the offshore wind industry to reduce CO2 emissions, tackle air pollution, commit to the Paris Climate Agreement and develop a strategic emerging industry. The installed capacity of offshore wind power in China reached 4445 MW in 2018 which was ranked third in the world. Big developers dominated the offshore wind energy market with domestic turbines. Many projects are under construction. The offshore wind industry in China has experienced four stages of price policy: demonstration, concession, feed-in tariff and market-oriented competition policy. Nevertheless, it is impossible to expand the installed capacity, lower the on-grid price (cost) and reduce the subsidy for the offshore wind power industry at the same time. This is the trilemma (impossible trinity) that needs to be addressed by the price policy. In the past decade, China has implemented an evolving price policy, i.e., a system and mechanism that encourage firms to invest in the offshore wind industry to expand the capacity of the industry by setting price and providing subsidy and other benefits. An overall evaluation based on the indicators of installed capacity, price, subsidy, spatial distribution, technology and industrial linkage shows that the price policy has been effective in balancing capacity, price and subsidy up to now. However, lowering the price and reducing the subsidy will be the major challenges that China has to overcome in the coming years in order to sustain its current growth trend. To boost the development of its offshore wind industry further, China needs to implement a market-oriented competition price policy and mechanism, learn from the experience of price policy evolution in European countries and open the market to foreign investors.
KW - Blue economy
KW - Climate change
KW - Energy policy
KW - Governance
KW - Low-carbon
KW - Marine economy
KW - Offshore wind
KW - Price policy
KW - Subsidy
KW - Trilemma
KW - Wind energy
KW - Wind power capacity
UR - http://www.scopus.com/inward/record.url?scp=85092291584&partnerID=8YFLogxK
U2 - 10.1016/j.rser.2020.110366
DO - 10.1016/j.rser.2020.110366
M3 - Article
SN - 1364-0321
VL - 136
JO - Renewable and Sustainable Energy Reviews
JF - Renewable and Sustainable Energy Reviews
M1 - 110366
ER -