Analysis and Support Policy Recommendation of Renewable Energy Sources in Western China

Abstract

Reduction of greenhouse gas emission levels in China is of great importance, because of their significant growth. Development of renewable energy sources is a key to the sustainable development of China while pursuing the low GHG emissions goals. In the paper, we present an overview of the development in the renewable energy sources (RES) in the Western Region of China (WRC). We analyze the abundant renewable energy resources in WRC with different energy specifications. We focus on China's WRC as the most important region for development of renewable energy in the future years. Due to its diversity in RES sources and different RES support initiatives, Western Region could serve as a testing ground for wider application of a uniform RES support policy in China. We analyze two cases of Chinese experience with RES support policy based on Tibet and Sichuan provinces located in West Region of China. We identify various barriers and success factors to promote RES development in WRC. We also review the current policy mechanisms, especially investment- or generation- based price-driven and capacity-driven mechanisms, ranging from investment incentives for the development of renewable energy projects, feed-in tariffs, production tax incentives, tendering systems, and quota obligations based on tradable green certificates. Based on European Union experience, we propose policy measures to stimulate RES development in WRC and present some instruments for its implementation.