China’s “Green Dispatch” Policy

Bobby Magill reports at Cleantechnica on this new development.

“Clean Dispatch” means using low carbon sources of electricity with priority. From the Cleantechnica article:

“China’s ‘green dispatch’ system will prioritize power generation from renewable resources, and establish guidelines to accept electricity first from the most efficient and lowest-polluting fossil fuel generators,” the presidents’ joint statement says.

This is similar to the German policy in Article 11 of the Law on Renewable Energy, which requires to use renewable energy with priority. There is a similar priority under Article 16 of the Renewable Energy Directive, which reads (in Paragraph 2 b)):

Member States shall also provide for either priority access or guaranteed access to the grid-system of electricity produced from renewable energy sources;

The Chinese “green dispatch” system seems to go even farther. I don’t know the details of this system, but from the quote of the joint statement above it seems that this would establish priority for gas over coal, and for coal over lignite, since coal emits more CO2 than gas.

An analysis by Michael Goggin at the American Wind Energy Association tells us how China has decided on this priority question until now. Being a “Planned Economy” it makes sense that they would have guaranteed quotas for every source. If you built a power plant, you were guaranteed a minimum amount of hours of operation for each year.

That meant that until now wind energy in China was unable to use its built-in advantage of close to zero variable cost to displace coal. The result of that was, that while China had 80 percent more wind capacity than the United States, the United States produced more wind energy than China.

Goggin thinks that this kind of priority for renewable energy is not necessary since it wins out in the market place anyway.

I disagree.

Wind and solar win out in a bidding war, but that may mean that they have to deliver the electricity below cost. While they will be able to secure business, they may be unable to secure a fair profit.

Anyway, I think it is an excellent idea to extend the existing idea of priority for renewable energy to priority for less CO2 intensive fossil fuel, that is to burn gas before burning coal.

And I think this should be the first thing one does when getting rid of the stramge policy governing these matters right now, called merit order. Give priority to low carbon sources. Never mind the cost.

The second step should be to pay everybody what they actually bid and use that to decide about priority between different sources at the same pollution level.

 

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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