This chapter examines the evolution of China’s energy policy since 1949 using the electricity industry as an example. Applying a public policy framework, the paper examines the processes of agenda setting, of policy design and decision-making and of implementation and learning. The policy agenda for energy in China has become progressively more complex, in reaction to changing domestic priorities, external events and ideas from abroad. The number of actors has grown in the energy sector, in general, and the power industry in particular. In combination with the decentralization of authority to local governments, this has made the process of policymaking more complex and the coordination of implementation more difficult. In the design of policy, the government has been reluctant to give up the tried and tested administrative instruments in favour of economic instruments. Rather, officials have preferred to stick to what they know, namely deploying exhortation, command and control regulation, direct financial support and state ownership. Market forces have played only a subordinate role in China’s electricity industry. Economic instruments such as subsidies, fines and feed-in tariffs have been deployed but often at too low a level to provide the incentive to change behaviours. This has led to frequent adjustments of policy instrument in order to achieve a programme’s objectives as the agencies learn from experience. For these reasons, China’s electrical power industry over nearly seven decades has been characterized by incremental reform and path dependency.
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Philip Andrews-Speed and Sufang Zhang
This chapter shows how many in mainstream finance are resisting the global transition to renewable resources and the circular economy because their models and financial algorithms have not yet been updated and are too reliant on historical data and risk assessment of narrow factors. These do not yet include the kind of environmental and resource risks covered, for example in the World Economic Forum’s annual Global Risk Reports, concerning climate, water shortages, inequality, cyber threats, etc. Meanwhile this chapter demonstrates that in spite of these barriers, the transition worldwide to cleaner, greener, knowledge-richer, more equitable economies, is proceeding rapidly.
Paul Stevens and Jennifer I. Considine
Resource curse has come back onto the agenda as a result of the so-called super cycle of commodity prices that began at the start of the century. As a result, there has been much discussion about how it might be avoided or at least managed. One obvious solution is to slow the development of the project to give the host country time to develop the institutional capacity to manage the potential for an attack of resource curse. However, investing companies argue very strongly against this on the grounds that delaying the cash flows reduces the net present value of the project. This chapter argues that by using option theory, delaying the development of the natural resource can potentially increase the value of the project.
Luciano de Castro, Joisa Dutra and Vivian Figer
Increasing penetration of EV integration to the distribution side of power systems is dramatically reshaping the distribution grids. Not only are EV chargings comparatively large loads; but also, with the concept of Vehicle-to-Grid (V2G), EVs can feed back the power stored in the battery to the grids, switching EVs from traditional loads to distributed generation. Compared with stationary storage, the primary challenge behind utilizing the energy stored in EVs lies in the uncertainties that vary for different owners and at different times: the arrival time, departure time and energy demands (for charging). This chapter proposes a Demand Side Management (DSM) strategy under which a Distribution Grid Operator (DSO) would target an optimal utilization of the energy stored in the EVs. The stochastic modeling of the uncertainties in EVs is developed in the context of a distribution grid. A Monte Carlo simulation method is applied to make the problem tractable. Furthermore, by tightly relaxing the boundaries of the constraints, we further convert the original non-convex problem into its convex counterpart. Finally, the methodology is tested using real-life data collected on the UCLA campus. Through extensive analysis we examine the merit of the proposed stochastic model, and the effect that the reverse power flow of EVs has on the distribution grids.
Liu Xiaoli and Tian Lei
Whether because of the various problems and challenges faced by China’s energy development, or the world’s low-carbon and green energy development trend, it is imperative for China to implement a low-carbon and green transition of energy. Vigorous development of natural gas is the realistic option based on the practical circumstances of China. However, how to accelerate the large-scale development and utilization of natural gas, improve the economic competitiveness of natural gas and ensure natural gas supply security are the key issues that determine whether natural gas can become a bridge energy source for a low-carbon and green transition of China’s energy. Therefore, China needs to accelerate reform of the whole industry chain of the oil and gas industry, to solve the problems of restricting the development of the natural gas industry in order to make natural gas play an important role in a low-carbon and green transition of China’s energy as soon as possible.
Anna Vypovska, Laura Johnson, Dinara Millington and Allan Fogwill
This chapter discusses key environmental and Indigenous peoples’ issues facing development of the natural gas and liquefied natural gas (LNG) industry in the Province of British Columbia, and examines the main approaches to mitigate, manage and monitor these issues effectively. The authors reviewed environmental assessment applications for 29 major natural gas and LNG projects in British Columbia that have undergone a typical environmental assessment process with the provincial or federal responsible authorities since 2010, as well as the content of primary regulatory documents and issues identified in relevant case law. The key environmental issues identified from the review include significant residual adverse effects related to greenhouse gas emissions; significant residual adverse effects and cumulative effects to rare and threatened wildlife species; and cumulative adverse impacts of natural gas development. The most common potential adverse impacts on Indigenous peoples’ interests summarized in the review include but are not limited to effects on health and socio-economic conditions; physical and cultural heritage; the current use of lands and resources for traditional purposes; sites of historical and archeological significance; and potential cumulative impacts on Aboriginal interests. The chapter also provides examples of key approaches to mitigate the foregoing issues and stresses the importance of effective consultation and engagement with Indigenous groups at early stages of the proposed projects development.
Jennifer I. Considine and Mary Lashley Barcella
Despite decades of global experience in designing, implementing and refining approaches to low carbon energy deployment, alarm bells are ringing over the rise of policy risk as a barrier to effective implementation. This is evidenced by constant policy, legal and regulatory reforms leading to a contiguous cycle of government intervention even in countries recognised as having some of the most advanced energy and climate governance frameworks in place. Worse, it is not really being addressed at all, a consequence of policy having typically received less attention in the field of energy studies than law or economics in addressing climate change. This chapter examines the role of policy risk and the significance of politics on governmental approaches to deploying renewable, nuclear and carbon capture and storage technologies by drawing on examples from the EU and the US with a focus on the UK. A recurrent theme in the analysis is that uncertainty deriving from low carbon energy policy and politics does not just affect deployment rates; policy risk goes deeper by playing a fundamental role in what low carbon technologies are chosen in terms of access to subsidies and preferential political support. As argued here, the adoption of legally weak (ambiguous) definitions of what renewable and low carbon actually means has given rise to support for politically convenient technology options that are not truly renewable or low carbon. This chapter highlights a number of lessons to be learnt in-order to address policy risk. Definitions for renewable and low carbon energy need to be revisited keeping in mind that they need to accurately reflect the requirements of the Paris Agreement. Linked to this, there also needs to be some understanding of the end destination of set targets and policy objectives in terms of what technologies will be used. Further, not all low carbon technologies face the same level of policy risk, and it could be argued that policy risk is being used as a tool for ideological and political objectives.
Edited by Jennifer I. Considine
Douglas B. Reynolds
Institutional economics theory suggests that the variance in institutions across countries can explain differences in cross-country output per capita such that better institutions result in better economic growth and vice versa. When considering the supply of oil, institutions may also explain how much oil hydrocarbon producing countries supply. For example, in the early 1970s, as nominal world oil prices increased from $2 to $14 per barrel of oil, a number of OPEC oil producers changed their internal institutional environments and started a process of nationalizing all petroleum-related capital and infrastructure. This affected oil supplies. While OPEC oil production had been increasing by 10 percent per year for the ten years prior to 1970, it increased by only 1 percent per year for the ten years after 1970, contrary to what normal supply side economic theory would suggest. Although many factors may explain this effect, institutional changes has to be one consideration. Further complex institutional changes may be happening again in this century now that oil prices are volatile and will have a large effect on oil supplies. This chapter considers the relationship between institutions, the supply of oil and the price of oil, especially in regards to risk taking and risk aversion within institutional frameworks. It also explains oil producer strategies including the Discount and Opulent Strategies.