- Improve national policies and regulations to secure sustained large-scale investment in renewable energy;
- Identify institutional, economic, and technical solutions for grid integration of renewable power;
- Support distributed generation and smart grid policy study and demonstration to scale up the development of distributed renewable energy; and
- Support long-term scenarios analysis and promote the establishment of a national strategy for transition toward a high renewable energy penetration future.
The China Renewable Energy Program aims to encourage large-scale development and utilization of renewable energy in order to drive down costs, speed up commercialization of renewable energy technologies, make renewable energy a mainstream energy source, and put renewable energy on a trajectory toward achieving over 80% market penetration by 2050.
China’s Renewable Energy Law, established in 2005, significantly improved the policy environment for renewable energy development, setting the industry on a path of continuous rapid growth. China is now a world leader in both wind power installation and solar photovoltaic power installation. China is moving at full speed to achieve its 15 percent non-fossil energy target for 2020.
However, significant challenges exist for China’s renewable energy to grow into a mainstream energy source. First, grid integration is now the single largest bottleneck for renewable power development; solving the grid integration problem will require improved power sector planning, technological upgrades in generation and transmission infrastructure, transformation of power sector operation and dispatch rules, and power market reforms. Second, effective supportive policies and business models, clear and streamlined management procedures, and smart grid technologies have yet to be developed to spur large-scale development of distributed generation. Third, the cost of renewable energy is still high and requires a large amount of public subsidy; stronger incentives are needed to drive down costs through technological advances and economies of scale. Fourth, China so far does not have a clear national strategy to guide renewable energy development. As a result, sectorial policy conflicts and weak policy enforcement are hindering the speed at which renewable energy can replace coal. The Renewable Energy Program supports efforts to tackle these issues.