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Dynamics of Renewable Energy in China: Drivers and Challenges

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Abstract: China has the world’s largest renewable energy market. It has one-third of the global wind power capacity and a quarter of the global solar capacity. Although the Chinese government is continuing to expand its investment in renewable energy, the share of renewable energy in China’s total energy consumption remains small. This chapter investigates the future growth in China’s renewable energy, with a focus on solar and wind energy. It examines the current status of renewable energy deployment in China and how the policy framework for supporting renewable energy deployment has been evolving. It also discusses factors that could further advance renewable energy expansion in China, including the pressure to improve air quality and reduce coal consumption, climate change mitigation, energy security and promotion of clean, indigenous energy sources, and economic transition and the development of clean energy industry. Major barriers to renewable energy deployment, such as social costs of replacing coal and concerns about grid reliability, are also discussed in this chapter. How to improve grid integration and stability and develop transmission infrastructure to effectively connect supply and demand is critical to renewable energy expansion. Thus this chapter also explores grid integration and transmission issues. With improved power system flexibility and stability and better institutional and policy support, renewable energy is expected to further expand in China in the coming decade.

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