Wednesday, July 14, 2010

[IWS] CRS: CHINA & U.S.--COMPARISON OF GREEN ENERGY PROGRAMS & POLICIES [ 14 June 2010]

IWS Documented News Service
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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
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Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)

 

China and the United States—A Comparisonof Green Energy Programs and Policies

Richard J. Campbell, Specialist in Energy Policy

June 14, 2010

http://opencrs.com/document/R41287/2010-06-14/download/1013/

[full-text, 24 pages]

 

Summary

China is the world’s most populous country with over 1.3 billion people. It has experienced

tremendous economic growth over the last three decades with an annual average increase in gross

domestic product of 9.8% during that period. This has led to an increasing demand for energy,

spurring China to add an average of 53 gigawatts (GW) of electric capacity each year over the

last ten years to its power generation capabilities.

 

China essentially functions as a “command and control” economy. The national government owns

or controls many of the country’s industries and enterprises, and sets goals for economic

development in the periodic Five Year Plans. China’s industries and enterprises are expected to

comply with the goals set in the national government’s economic plan. China has set ambitious

targets for developing its non-hydropower renewable energy resources with a major push of laws,

policies, and incentives in the last few years. The wind power sector is illustrative of China’s

accomplishments, as installed wind power capacity has gone from 0.567 GW in 2003 to 12.2 GW

in 2008. Plans already exist to grow China’s wind power capacity to 100 GW by 2020. A similar

goal exists for the solar photovoltaic power sector which China intends to increase generating

capacity from 0.14 GW as of 2009 to over 1.8 GW by 2020. China recognizes that given the

growing demand for energy at home, developing its domestic renewable energy industry and

building manufacturing capacity can lead to advantages in future export markets.

 

However, energy efficiency and conservation are officially China’s top energy priority. These are

considered the “low-hanging fruit” in the quest to reduce energy use and cut demand. Energy

conservation investment projects have priority over energy development projects under the

Energy Conservation Law of 1997, with government-financed projects being selected on

“technological, economic and environmental comparisons and validations of the projects.”

 

The key piece of legislation in recent years for advancing renewable electricity in China is the

Renewable Energy Law of 2005. The law was designed to “promote the development and

utilization of renewable energy, improve the energy structure, diversify energy supplies,

safeguard energy security, protect the environment, and realize the sustainable development of the

economy and society.” Renewable energy is subsidized by a fee charged to all electricity users in

China of about 0.029 cents per kilowatt-hour (kwh). The fee was originally based on the

incremental difference between coal and renewable energy (estimated in China at $0.044 to

$0.059 per kwh), and goes to the companies which operate the electricity grid and must buy

renewable power from project developers.

 

In contrast, the United States has largely a market-driven economy. Some argue that the United

States does not have a comprehensive national policy in place for promotion of renewable energy

technologies, with some observers saying that the higher costs of renewable electricity are not

conducive to market adoption. However, the reasons for increasing the use of renewable energy

are diverse, and include energy security, energy independence, cleaner air, and more recently

anthropogenic climate change, sustainability concepts, and economic development. Such goals

could reasonably be said to apply both to the United States and China. Pending legislation in the

111th Congress contains provisions which could serve to increase power generation from

renewable energy by establishing market drivers (such as a national renewable electricity

standard) which could catalyze U.S. renewable electricity development.

 

Contents

Introduction ...............................................................................................................................1

Existing Laws, Programs, and Incentives.....................................................................................2

China ...................................................................................................................................2

Clean Energy Research and Development Programs........................................................3

Key Legislation Promoting Renewable Energy................................................................4

Renewable Energy Focus ................................................................................................7

Incentives, Subsidies and Procurement Programs ..........................................................10

United States.......................................................................................................................12

Clean Energy Research and Development Programs......................................................13

Key Legislation Promoting Renewable Energy..............................................................13

Renewable Energy Focus ..............................................................................................15

Incentives, Subsidies and Procurement Programs ..........................................................16

Discussion ...............................................................................................................................17

Tables

Table 1. China—Renewable Energy Deployment Targets ............................................................6

Contacts

Author Contact Information ......................................................................................................21

 



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