Designing Deployment Policies to Maximize the Co-benefits of China's Clean Energy Transition

Abstract

China’s rapid economic growth over the past few decades has been fueled by the coal-dominated energy system. The increasing consumption of coal and other fossil fuels has resulted in a dramatic increase in China’s greenhouse gas (GHG) emissions and worsening ambient air quality. The Chinese government has designed and implemented various deployment policies to support the transition toward significantly less coal and other fossil fuel consumption. My dissertation focuses on the climate, air quality, and industrial growth co-benefits of various deployment policies in China. It includes three analytical chapters.

Chapter 2 analyzes the climate, air quality and human health benefits of various solar PV deployment scenarios in China in 2030. I find that deploying distributed PV in the east with inter-provincial transmission maximizes potential CO2 reductions and air quality-related health benefits. Deployment in the east with inter-provincial transmission results in the largest benefits because it maximizes displacement of the dirtiest coal-fired power plants and minimizes PV curtailment, which is more likely to occur without inter-provincial transmission.

Chapter 3 analyzes the climate, air quality and human health implications of replacing small heating stoves with gas and electric heating in China. I examine the implications of using gas (conventional gas or coal-based synthetic natural gas (SNG)) and electricity (either resistance heaters or air-source heat pumps) for heating. I find deploying heat pumps as a substitute for small solid fuel stoves for heating has the greatest long-term potential of significant air quality and climate co-benefits as China further decarbonizes its power sector.

Chapter 4 analyzes the role of deployment policies in promoting industrial growth in China’s wind, solar PV and Lithium-ion battery industries. I argue that deployment policies are effective to support industrial growth when the end uses of the clean energy technology are relatively few and concentrated. For battery storage technology, I find that there are multiple use cases of storage systems in the power sector, which makes direct subsidization for battery storage systems less effective in promoting the Li-ion battery industry compared to China’s wind and solar industries.