中國電力市場改革棋局新動向（英）

NewmovesinChina’spowermarketreformchessgameThispaperprovidesanupdateonChina’sprogresstowardsachievingcarbonpeakingandneutralitygivendevelopmentsinthepastyear,particularlyintermsofmajorgrowthinbothcoalandrenewablecapacity,aswellasthenewlypublishedpowermarketreformdocuments.?High-levelemphasisonenergysecurityoverclimateandairqualityprioritiesiscontributingtoaburstofcoalpowerconstructionacrossChina.Coaladditionsaretakingplaceinregionswithamplecoalcapacitytomeetpeakandbalancevariablerenewables.Thisappearstobedrivenprimarilybythedesireofprovincialofficialstolockinmoreinfrastructureinvestmentsnow,whilecoalplantsareencouraged.?China’spresentcoalboomislikelytoleadtoovercapacityinmanyprovinces.Currently,Chinareliesonadministrativepoliciestoencouragegridcompaniesandprovincialplannerstoabsorbvariablerenewableenergy.?Asthecoalovercapacityproblemworsens,financiallossesatcoalplantsaredrivingthepushtoadoptaspecificcapacitypaymentforcoalplants.ThecapacitypaymentpolicyannouncedinNovember2023couldprovidefurtherincentivetobuildmorecoalcapacity,whichmighteventuallyleadofficialstoweakenrequirementsforfullyutilizingwindandsolarenergy,andeventodiscourageconstructionofnewwindandsolarcapacity.?China’sotherrecentmarketreformdocuments,suchastherecentlyreleasedprinciplesforanationalpowermarketdesign,leavemostaspectsofmarketdesignuptoprovincialofficials,andmayprovideinsufficientimpetustoincreasevolumesofinter-provincialtradingorspotmarkettradingthatcouldreducethemotivationtobuildmorecoalplants.?Thecoaloverbuild,whileaimedatimprovingreliability,willalsoleadtohighercosts,especiallycomparedtoalternativessuchasincreasingpowertradingamongprovincesandregions,orincreasingdemandresponsebyallowinggreaterpricevolatilityinshort-termpowermarkets.Highercostsultimatelyleadtohigherelectricityprices,whetherthesearebornebythestate(suchasthroughfinanciallossesatstate-ownedcoalplants)orbyelectricitycustomersthroughhigherprices.?Similarly,coalovercapacitycouldrestricttheinterestininvestmentinnewgascapacityand,intheabsenceofhigh-volumespotelectricitymarkets,couldreducethedispatchofexistinggas-firedpowerassets.?Chinaremainscommittedtocarbonneutralityanditsrenewablecapacityisalsoexpandingatanacceleratingrate,includingdistributedsolarphotovoltaics(PV)andenergystoragetobalancetheintermittencyofrenewables.WindandsolarnotonlywillexceedChina’s2030targetsyearsaheadofschedule,butalsocouldsurpasswhatvariousforecastssuggestedChinawouldneedtoachievecarbonneutralitybymid-century.1However,thisassumesthatrenewablescontinuetobeaddedandfullyutilized.?Whilerenewablesaregrowingatanunprecedentedpaceandcurtailmentispresentlyundercontrol,tyingupfinancialresourcesinexcesscoalcapacitycouldpressureplannersandothermarketplayerstoslowtheenergytransition.Thiscouldincludeallowinggreaterwindandsolarcurtailment(whichallowscoalplantstooperateathigherlevelstorecovercosts),discouragingnewrenewableadditions,orimposingnewcostsonrenewablegenerators(suchascapacitypayments,storagerequirements,orrequirementstosubsidizelocalindustry)thatwouldslowinvestmentinthefield.?Lastly,anenergytransitionwithahigherpeakofcoalelectricityproductionimpliesincreasedtensionatglobalclimatetalks,giventhevisibilityofChina’scoalbuild-outandthegovernment’ssensitivitytocriticismonthispoint.NowthatChinahaslargelyendedfinancingforcoalprojectsabroad,ironicallythistendstofocusevenmoreglobalattentiononChinaasthelastcountrystillbuildingcoalpoweratscale.2Electricpowermarketreformisalongprocess.InApril,China’sNationalEnergyAdministration(NEA)comparedthecountry’schangingpowersystemandrelatedreformstoa‘gameofchesscoveringthewholecountry’.Powermarketreformshavenowbeenunderwayforeightyears—thatis,since2015,whenChina’sStateCouncilissuedDocument#9ondeepeningreformofthepowersector.3Aflurryofdocumentsreleasedoverthepastseveralmonthsleavemanyimportantissuesunresolved,andcontradictionsappeartobeincreasingbetweenvarioushigh-levelpolicypronouncementsonclimate,energysecurity,andtheroleofmarkets.TheseincludeanewsetofnationalpowermarketdesignprinciplesissuedinSeptember,anewpolicyexpandingthecoverageofgreencertificates,andanewcapacitymechanismthatwouldoffercoalplantspaymentstohelpthesectoravoidfinanciallosses.Step-by-stepprogressonreformpolicies,combinedwiththeacceleratingbuild-outofrenewableenergy,cancontributetomeetingChina’sclimateobjectivesofcarbonpeakingandcarbonneutrality.However,overcapacityincoalpowerandnewincentivesforcoalgeneratorscouldultimatelyslowthebuild-outanduptakeofcleanenergy,andcouldincentivizelocalofficialstode-prioritizeclimatepolicy,underminingChina’sannouncedclimateobjectives.Inearly2022,theNationalDevelopmentandReformCommission(NDRC)setoutatimelineforpowermarkets,callingforanationaldesignby2025,andforthisdesigntobebasicallyimplementedby2030.4Thistimelinesuggeststhatpowermarketreformsareonlyjustpastthehalfwaymark.Thedocumentlistedvarioustypesofpowermarketsthatthenationalmarketwouldinclude:capacityby2060toachievNovember2022,athttps://www.cet.energy/2022/11/12/china-energy-transformation-outlook-2023-special-report-for-cop27/.andSudarshanVaradh/business/energy/india-amends-power-policy-draft-halt-new-coal-fired-capacity-sources-/fggz/tzgg/ggkx/201504/t20150409_1077736.htmlor/pufa_view.aspx?id=31434.4‘我國將加快建設全國統(tǒng)一電力市場體系[ChinawillacceleratedevelopmentofaunifiednationaNationalDevelopmentandReformCommission,3February2022,at/xinwen/02/03/content_567182Thecontentsofthispaperare2?Aunifiednationalmarket,withtradingcentresinBeijingandGuangzhou,andeventuallyasinglenationaltradingcentre;?Regionalandprovincialmarketswithinthenationalunifiedpowermarketsystem;?Cross-provincialandcross-regionalmarkets;?Medium-andlong-termelectricpowermarkets—typicallywithcontractsofamonthoryear,thoughtermscanbelongerorshorter;?Electricityspotmarkets;?Ancillaryservicesmarkets,whichprovideflexible,rampingresources.Inaddition,theNDRCdocumentcalledforexploringtheroleofgreenpowertradingandestablishingacapacitypaymentmechanism.Thisyear’senergyworkplanincludedspotmarketdesign,energybases,distributedPV,andgreencertificates.5Allarenowclearlyunderway.Asidefrompolicy,majoreventsandspeechesaresendingoutdifferentsignals.Thoughenergysecurityhasbeenunderlinedasatopnationalprioritysince2019,theenergyshortagesin2021and2022underlinedtheurgencyofprioritizingenergysecurityoverotherlong-termgoals.Thisyear’sGovernmentWorkReport,releasedattheTwoSessionsoftheNationalPeople’sCongress,statesthatChinawill‘givefullplaytotheroleofcoalasthemainenergysource’,anewbutonlyslightlydifferentphrasingforcoal,whichhadearlierbeencalleda‘ballaststone’(stabilizingfactor)or‘foundation’oftheenergysystem.Inearly2023,NEA’sannualworkplanlistedenergysupplysecurityfirst,aboveotherimportanttasks.Leadingintothesummer,China’spoorhydroconditionsandasustainedheatwaveinnorthernChinapassedwithoutmajorelectricitydisruptions.Notonlyhascoalpowerhelpedfillthehydrogap,butChina’sprovinceshavebeenonacoalbuildingspree.Yetconstructionofnewwindandsolarhasalsoaccelerated,andthemarketshareofcleanenergyisrisingevenascoaloutputgrows.Thisraisestwoimportantquestions:First,willcoal’scomebackprovetemporary,andareChina’sclimateobjectivesofcarbonpeakingandcarbonneutralitystillontrack?Second,ispowermarketreform,especiallyrecentpolicies,likelytoaccelerateChina’senergytransition,oristheslowpaceofreformholdingitback?China’sadditionsofwindandsolarPVareexperiencinggrowthunlikeanyseenpreviouslyanywhereintheworld.Inthefirstthreequartersof2023,Chinaadded129GWofnewPVcapacity,6up145percentfromthesameperiodtheprioryear,andfarhigherthanthetotaladdedforthefullyearof2022(87GW)(Figure1).Indeed,ChinaaddedmorePVinthefirstthreequartersthanthetotalinstalledPVcapacityoftheUSAattheendof2022(119GW).Windcapacityadditionswerealsoupstrongly:inthefirstthreequartersof2023,Chinaadded33GWofwind,comparedto19GWaddedinthesameperiodof2022(Figure2).7GiventhatmostwindandPVadditionstypicallycompleteattheendoftheyear,itispossiblethatChinacouldaddover200GWofwindandsolarin2023.Thisissubstantiallyhigher/2023-04/06/c_131076‘國家能源局2023年四季度新聞發(fā)布會文字實31October2023,at/2023-10/31/c_1310748132.htm.31October2023,at/2023-10/31/c_1310748132.htm;‘國家能源局2022年四季度網(wǎng)上新聞發(fā)布會文字實/2022-11/14/c_13106Thecontentsofthispaperare3thanforecastsfor160GWofadditionsatthebeginningoftheyear,aswellasthetargetsetinthe2023energyworkplan.8Figure1:China’shistoricalsolarPVcapacitythrough3Q2023GW5604904203502802101400393306253204 774370.937201020112012201320142015201620172018201920202021202220233QCentralizedsolarPVDistributedsolarPV(non-household)HouseholdsolarPVFigure2:China’shistoricalwindpowercapacitythrough3Q2023GW4003002000400370328.5328.528121046 2023201020112012201320142015201620172018201920202021202220233QWind-onshoreWind-offshore33percent],’Beijixing,January2023,at/mnews/20230103/1280289.shtml;‘2023年能源工作指導意見[2023EnergyWorkPlanGuidingOpinions,’NationalEnergyAdministration,April2023,athtThecontentsofthispaperare4#612GWHenanJiangsu#67GW#216GWZhejiangTop10coalandwind+PVTop10coalTop#612GWHenanJiangsu#67GW#216GWZhejiangTop10coalandwind+PVTop10coalTop10wind+PV#105GWHubeiIntermsofgeography,mostsolarPVisbeingaddedinEastChina,especiallyinShandong,Hebei,Jiangsu,Henan,Zhejiang,Guangdong,andAnhui.ThesesevenprovincesaccountedforoverhalfofPVadditionsin2022andthefirsthalfof2023.ManyofthePVadditionsintheseregionsareonresidentialrooftops,reflectingtheWholeCountyPVProgramme,whichhasayear-end2023completiontarget.Forwind,NEAreportedthat70percentofnewadditionsin2023wereinthenorthernhalfofChina.9Leadingprovincesfornewwindadditionsin2022andthefirsthalfof2023wereInnerMongolia,Jilin,Heilongjiang,Shandong,andGansu,togetheraccountingforover60percentofnewwindadditionsduringthisperiod.Asforcoal,Chinaapprovedatleast50GWofcoalcapacityinthefirsthalfof2023,farmorethanaddedinrecentyears,withtheexceptionof2022whenChinaadded70GWofnewcoalcapacityforthefullyear.AsshowninFigure3,provincesaddingmostcoalcapacityin2022andthefirsthalfof2023wereGuangdong,Jiangsu,Hebei,Anhui,Jiangxi,Henan,Zhejiang,Guangxi,Shandong,andHubei.Greenpeaceanalysedindividualplantdocumentsandfoundthatplanningdocumentscitedvariousjustificationsforaddingnewcoal:providingmoreenergy,winterheating,oreveneconomicstimulus—inshort,notnecessarilyspecificallytailoredforpeakregulationorrenewableintegration.10Figure3:China’s2022and1H2023topprovincesincoalandrenewableenergyadditionsInnerMongoliaHebei#314GWHebei#315GWShandong#77GWShandong#121GW#219GW#612GWAnhui#48GWAnhui#712GW#95GW#412GWJiangxi#58GWGuangxiGuangxi#85GWGuangdongHunan#910GWGuangdongHunan#1010GW#1#1010GW#811GWAdministration,31July2023,at/2023-07/31/c_1310734825.htm.10‘China’s2023coalapprovalsgroEastAsia,3August2023,at/eastasia/press/8139/chinas-2023-coal-approvals-grow-to-50-4-gw-as-coal-constricts-space-for-energy-storage-climate-solutiinallof2021—Greenpeace,’GreenpeaceEastAsia,24April2023,at/eastasia/press/7939/china-has-already-approved-more-new-coal-in-2023-than-it-did-in-all-of-2021-greenpThecontentsofthispaperare5Thereisstrongoverlapbetweenprovincesaddingrenewablesandthoseaddingcoal,butthereisnoapparentlinkbetweennewcoalcapacityandtheneedtobalancetheintermittencyofrenewables.Newcapacityispouringintoregionsthathaveamplesurpluscapacityalready,whereasprovincesthathaveexperiencedincreasedvulnerabilitytopoweroutagesduetopoorhydroconditionsappearlessactive.ArecentstudybytheCentreforResearchonEnergyandCleanAir(CREA)foundthatalmostallcoalplantswereconstructedinregionswherethermalcapacityfarexceededpeakloads(especiallytheNorthChina,CentralChina,andNorthwestChinaregions),andinprovinceswherethermalcapacityalreadyhasmorethantriplethelocalcapacityofvariablerenewables.11Coalpowerhasalsobeenproducingmoreelectricity,largelytoreplacehydro,whichhasundergoneasecondconsecutiveyearofshortages.InJune,hydroelectricityoutputfell34percentyear-on-year,whilecoaloutputrose14percent.12HydrooutputincreasedsubstantiallyinAugust,potentiallyhelpingtoalleviatenear-term(2023and2024)powershortageconcerns,andleadingtoaslightmonthlydeclineincoalpower.China’scoalpowerbuildingboomhasbeenunderwayforseveralyears,evenascoaladditionsdwindledintherestofthedevelopingworld,raisingconcernsworldwideaboutlockinginemissions.Indeed,thebuildingboomroughlycoincideswithPresidentXi’sannouncementoftheDualCarbongoals.Thecoalexpansionfollowedaperiodfromroughly2016to2019,inwhichcentralregulatorsstruggledtoclampdownoncoalovercapacity,andsoughttoaddresstheissuebyadoptingasetoftrafficlightpolicies(from2020onward)designatingwhichprovincescouldseekapprovalfornewplants.13Perceptionsofaloomingelectricityshortage—reinforcedbytheactualoccurrenceofmajoroutagesin2021and2022—combinedwithrenewedfocusonenergysecuritybeginningroughlyin2019,shiftedthefocusofbothcentralandlocalplannersawayfromovercapacityandtowardsreinforcingcoalasthe‘ballaststone’ofthepowersystem.WhilesomenewdispatchablecapacityisundoubtedlynecessaryunderChina’spresentcircumstancesofincreasingpeakloadsandsurgingwindandsolarcapacity,newcoaladditionsdonotappeartoresultfromanationalplanorofficialpolicy.Indeed,theturnbacktocoalrepresentsareversalofpolicytrendsthathadbeenevidentjustafewyearsago.InJanuary2021theCentralEnvironmentalInspectionTeam(CEIT)criticizedNEAforfailingtostrictlycontrolcoaladditionsand‘a(chǎn)pprovingwhatshouldnotbeapproved’,14andinApril2021PresidentXipledgedto‘strictlycontrol’newcoalcapacitythrough2025,15afterwhichcoalshouldstarttodecline.Currently,thereislittleevidencethatcontrolorsupervisionofcoalcapacitybyNEAorotherplannershasbeenincreasedormadestricter.Regionsandprovinceswiththermalpowercapacitysubstantiallyhigherthanpeakload—withoutaccountingforrenewables—continuetoseestronggrowthincoalResearchonEnergyandCleanAir,29August2023,at/wp/wp-content/uploads/2023/08/CREA_GEM_China-coal-power-briefing-2023H1_08.2023.pdJuly2023,at/china-energy-and-emissions-trends-july-snapshot/.13ForsomediscussionofcentralgovZhangetal.,‘ReducingcoalovercapacityinChEnvironmentalScienceandPollutionResearchvolume29,22July2022,at/article/10.1007/s11356-022-22010-2andJiahaiYuanetal.,‘Chinaoverinvestedincoalpower:Here’swhy,’CentreforEconomicPMarch2019,at/voxeu/columns/china-overinvested-coal-power-heres-why;‘國家能源局關于發(fā)布2023年煤電規(guī)劃建設風險預警的通知[NEANoticeon2023CoalPlanningaNationalEnergyAdministration,26February2020,at/2020-02/26/c_138820419.htm.14‘中央第六生態(tài)環(huán)境保護督察組向國家能源局反饋督/xxgk2018/xxgk/xxgk15/202101/t20210129_819526.html.Th建的建了’,or‘whatsho15DavidStanwayandCate2021,at/world/china/chinas-xi-says-china-will-phase-down-coal-consumption-over-2026-2030-2021-Thecontentsofthispaperare6poweradditions.16Whilemostorallnewcoalplantsarenowdescribedasservingthedualpurposesofpeakloadregulationandrenewableintegrationbackup,analystshaveobservedthatmanycoalplantsappeardestinedmainlyforbulkpowerproduction.17Theprimarypurposeofaddingnewcapacityappearstorelatetoprovincialgovernmentsseekingtolockininvestmentsforlargestate-ownedenergyprojects,combinedwiththelongstandingdesiretobuildoutprovincialthermalcapacitytoavoidimportingpowerfromneighbouringprovinces.Intermsofhandlingthechallengeofintegratingvariablerenewableenergy,Chinaisalsoaddingbatterycapacityatafuriousrate.AccordingtofigurespublishedbytheZhongguancunEnergyStorageIndustryTechnologyAlliance(ChinaEnergyStorageAllliance,CNESA),China’slargestenergystoragegroup,Chinaaddedarecord12GWofbatteryenergystoragein2022,almosttriplingitstotalcapacity.18Evenmoresignificantly,China’scurrentlyplannedbatteryenergystoragepipelinehassurpassed100GW,muchofwhichCNESAexpectstobecompletedwithintwoyears.(CNESA’sofficialforecastsaremoreconservative,suggestingChinawouldreach100GWbyaround2026or2027.19)Inanycase,Chinashouldfarsurpassitsofficialtarget(setbyNEAin2021)for30GWofnewenergystorageby2025.20WhilethelargestprojectsareinremoteareassuchasXinjiang,Qinghai,andGansu—withQinghaiaddingtheworld’sfirstGW-scalebattery—majorinstallationsarealsotakingplaceineasternChina,suchasinHebeiandShandong.Shandong,Shanxi,andGansuhaveallowedstoragetoparticipateinspotmarkettransactions.Typicalenergystorageprojectshavetwohoursofenergystoragecapacity.Hence,batteryandpumpedhydrostorage(59GWin2022)isfarsmallerthanthecountry’swindandsolarcapacity(over900GWasof3Q2023).However,everyunitofstoragecapacitydoesprovideflexibilitythatoffsetstheneedforsomenewcoaladditions,andcouldultimatelydirectlycompetewiththenewcoalcapacitybeingaddedcurrently.ThewindandsolarshareofelectricityprAsrenewablecapacitycontinuestogrow,itsshareofgenerationhasincreased,graduallychippingawayatcoal’sshareevenascoaloutputrisesaswell.Inthepasttwoyears,China’swindandsolarsharehasgrownatovertwopercentagepointsannually,andthisyear’sincrementalincreasecouldeasilymatchthat,risingfrom14percentin2022toabove16percent,evenasthehydroshortagedipsintothecleanenergyshare.Intermsofbothcapacityandelectricitygenerated,windandsolarremainontrackorevenaheadofwhatisneededtomeetChina’scarbonneutralitytargetby2060.China’sofficialtargetscallforcleanenergytoprovidethemajorityofincrementalelectricityproduction,agoalthatstillseemsconservativeinlightoftheircurrentgrowthrates.ResearchonEnergyandCleanAir,29August2023,at/wp/wp-content/uploads/2023/08/CREA_GEM_China-coal-power-briefing-2023H1_08.2023.pd/en/energy/where-are-chinas-emissions-really-/html/20230116/1283/chuneng/dongtai1/20230411/1EnergyAdministration,21April2021,at/2021-04/21/c_139896047.htm.Thecontentsofthispaperare7FuturerenewablecapacitWhatdothecapacityadditionsmeanforthefutureofrenewablesversuscoal,andforthelow-carbontransition?High-levelsignalscontinuetoindicatecoalhaspoliticalbacking,withlongtimetopclimatenegotiatorXieZhenhuasayingrecentlythatitisunrealisticforChinatophaseoutcoal,andrepeatingXiJinping’sphraseabouttheneedtofirstbuildthenewbeforetearingdowntheold.21Thishigh-levelsupportforcoaldoesn’toffermanycluesaboutwhatwillhappenafteryearsinwhichChinacontinuestobuildthe‘old’and‘new’simultaneously,withthermalcapacityfarexceedingregionalpeakloads.Inthelongrun,thefutureofrenewableenergybecomingthe‘main’energysourcebymid-century,asindicatedinthe14thFive-YearPlan,dependsonbothcontinuingtoaddnewcapacityandcontinuingtouseitsoutputfully.Priorto2019,windandsolarsufferedfromseriousissueswithcurtailment,withwindcurtailmenttopping20percentinmanyprovinces,includinginregionswithampletransmission.Oneleadingfactordrivingcurtailmentwasaprovincialandgridcompanypreferenceforupholdingmonthlyandannualdispatchcontractswithcoalplantsratherthanacceptingvariablerenewableenergy.22Administrativemeasureswereadoptedtoencouragegridoperatorsandprovincialofficialstoreducecurtailment—financialpenaltiesforgridcompaniesandannualrenewableenergyquotasforprovincialofficials—andthesemeasureshavekeptcurtailmentlowevenaswindandsolarcapacityandoutputquadrupled.23Suchadministrativemeasuresfromthecentralgovernmenthavebeenmadenecessarygivenprovincialpreferencesforcoalpowerasastimulusmeasure,employmentsource,anddriveroflocaltaxrevenues.Administrativecontrolshavepoliticallimits,andthereisapossibilitythatprovincialofficialsandgridcompanieswilleventuallypushbackonrenewables,allowingcurtailmenttodriftupinfavourofcoalagaininthefuture.Oncurtailment,provincescouldresistacceptingrenewableenergyfromneighbouringprovinces,especiallyiftheprovincehasalreadymetitsrenewableobligationfortheyear.2421DavidStanway,‘Chinaclimatee/sustainability/climate-energy/china-climate-envoy-says-phasing-out-fossil-fuels-unrealistic22HaoZhang,‘PriImplementation’,ChineseJournalofEnvironmentalLaw,3December2019,at/view/journals/cjel/3/2/article-p167_3.xml?languageIn2016,whenwindandsolarcurtailmentpeakedat16percentforwindand11percentforsolar,China’swindcapcent.Themainpoliciesleadinlevelsby2019,aswellaspenaltiesforgrid2018,/xxgk/zcfb/ghxwj/201812/t20181204_960958.html;‘可再生能源發(fā)電全額保障性收購管理辦法,發(fā)DevelopmentandReformCommissionNumber625,24March2016,/2016-03/28/c_135230445網(wǎng)企業(yè)全額保障性收購可再生能源電量監(jiān)管辦法(修訂)(SupervisionActAmendment(Revised)(2019,at/xwdt/tzgg/201911/t20191122_1204501.html.24Theprovincialrenewableoblelectricityconsumptionfromrenewableenergy,withseparatetargetsfthenon-hydrosubset.Thetargetsaretransmissioncapacityfortheyeararealreadyestablished.InththeyarenotintendedtoguideinTheyareanadministrativemechanismforensuringimplementationof省級行政區(qū)域2020年可再生能源電力消納責任權重的通知[RenewableEneThecontentsofthispaperare8Oncapacity,provincesmayeventuallyclampdownonrenewableadditions,claiminginadequateabilitytoabsorbthepowerlocally—especiallyifinter-provincialtradingfailstoexpandasnecessary.Inthepast,provinceshaveusedannualplansfor‘renewableenergyconsumptioncapacity’—setbylocalofficialsandgridcompaniesthroughaclosed-doorprocess—toessentiallyforbidnewwindorsolarinvestmentslocallyevenwhileapprovingnewlocalcoalplantstomeetrisingpowerdemand.Forexample,inMay2020,Hunanofficialsannouncedahalttoallnewground-mountedsolarPVprojectsintheprovince,citinginadequate‘consumptioncapacity’.AtthatpointtheprovincialPVprojectpipelinewasjust1GW.However,aweeklatertheprovinceapprovedanew2GWcoalplant.25Morerecently,individualcountieshavebeenaccusedofforbiddinganynewsolarinstallationsduetooversupply,andhaveignoredmultipleinstructionsfromthecentralgovernmentnottoissuesuchbans.Inacolourfulphrase,oneexpertlikenedlocalinterpretationsofthesepoliciesprohibitingsuchsolarbansto‘a(chǎn)monkwithatwistedlipreadingthewrongsutra’.26Provinceshavealsoimposedadditionalcostsonrenewablegenerators,suchasrequiringprojectownerstopromisetoinvestinlocalindustrialprojectsinexchangeforapproval.Thepractice,knownas‘tradingindustryforprojects’,issometimesexplicitandquantitative.AcountyinZhejiangprovincerequiresinvestmentinlocalindustryofRMB300millioninexchangeforapprovinga100MWsolarproject.ShandonghasrequiredalargesolarprojecttotakeonRMB3billioninlocaldebtinexchangeforprojectapproval.27ThesepracticesviolateearlierinstructionsfromNEAthatbarredprovincesfromimposingextrafeesonrenewablegeneratorsthatdonotrelatetodirectcostsintheenergysystem.Despitethissituation,theoutlookforrenewablesremainspositivefortworeasons.First,itisunlikelythatChinawouldabandonitsDualCarbongoalsortheconceptofanEcologicalCivilization,givenboththeirprominencedomesticallyandinternationally,andtheirdirectlinktoPresidentXi.Second,China’scleanenergyindustryhasbecomeaneconomicdriverinitsownright,aswellasapoliticalpriorityalignedwiththeconceptof‘highqualityeconomicdevelopment’.Ifthedomesticmarketforwind,solar,andbatteriesfelldramatically—beyondthemoreperennialproblemofovercapacityincleanenergymanufacturing—thiswouldbringunacceptablepoliticalandeconomicconsequencesforbothprovincialandnationalofficials.expenseofotherenerMarketreformscouldplayanimportantroleinbolsteringcleanenergy,givenitsimprovingeconomicsandlowmarginalcost.AsnotedinapaperpublishedinFe