DERC_卓尔德

Draworld——Pursue the sustainable energy solution

Draworld Center was founded in 2012 with a boutique team working on applied research and consulting on China’s energy and environment policies and sectoral dynamics. Our work is fully-independent in China’s special context. The recent work focus on the power, transport and renewable energy related technology, economics, policy modeling and assessment. Previously, our work got the wide support from various international funders and institutes, including Environmental Defense Fund (EDF) of US, Energy Foundation Beijing, China Wind Power Association, International Institute of Sustainable Development (IISD).

In a fast-evolving world, we have changed our organisational structure accordingly since early 2020. Now, we have two groups working on:

Digitalisation of the energy sector in the context of China. The technology, economics, policy and politics all matter given the attributes of China energy sector, among others, dominated state-owned entities, limited transparency, and lack of clear and consistent rules.
The nexus of China with the other world. In a more and more fragmented and less rule-based international regime, how China would interact with other big players e.g. US and EU through the channels of trading, global challenge, and others? We focus now on the European Green Deal and how it is related to China in the 2020s.

Details……

Viewpoints and Publications

How to keep coal unprofitable in China?

China Dialogue, July 2023

What factors hinder the wind and solar PV approaching their optimal share in China?

Energy Magazine, June 2023

Why China’s renewables push fuels coal power investment?

China Dialogue March, 2023

Would the power outrage in Sichuan catalyse the power grid institutional reform?

Caixin, Sept. 2022

Re-starting of the power reform: building the new criteria of success

Wind Magazine, April, 2022

Embrace the carbon neutrality in China: The introduction

Energy Magazine, July 2021 - June 2024

The energy security: the approach at the margin or as the whole

Energy Magazine, May 2021

The review on the power reform since 2015 and which economic and/or political factors determine its future?

Energy Magazine, Feb. - March, 2021

The inflexible transmission of power in China: why the misleading persistent?

Energy Magazine, Aug, 2020

The energy security concern and the 14th FYP (2021-2025)

Energy Magzine, Feb 9. 2020

Coal power in the 14th FYP (2021-2025): where is the enabling space for policy?

Energy Magzine, Sept 9. 2019

China's green certificate design: why the negative learning happened?

China Energy Newspaper, Aug.23, 2019

The power sector reform should focus on institutional barriers again

Energy, Vol 3, 2019

Whether the rich renewable energy resource in China's west region with intrinsic value?

Energy, Vol 10, 2018

Energy transition and low carbon development: key insights of Draworld

Energy, Vol 3, 2018

The optimal power mix by 2020 in China: to what extend coal power excessive

Energy, Vol 10, 2017

China power sector reform 2015-2017: the good, the bad and the ugly

Energy, Vol 4, 2017

Coal power and wind power: which one is in priority in China

Energy, Vol 7, 2016

Increasingly wind curtailment: problem and solution, and cost sharing

Energy, Vol 5, 2016

Energy transition and the 13th Five-year Plan: developing wind power more efficiently

Wind Energy, Feb., 2016

Natural gas power generation necessary to expand in China

Energy, 2015. 12.15

Implication of the variability of (net) electricity demand

Nandudu 2015.07.14

Public policy option to alleviate the coal sector difficult situation

Caijing 2015.07.06

Impact on the power system of wind power integration- perspective of technology, system cost, and market

Energy 2015.06.29

Power sector reform: start from aiming to reduce deadweight loss

Sina 2014.12.1

Evidence exist or not for coal mining development by the government guidelines?

Nandudu 2014.11.19

Power reform: insufficient proposal but with high risk

Energy Vol 11,2014

Power sector reform: what's the China's characteristics

Caixin 2014.9.23

Role of renewable in energy mix: starting from several disputes

Caixin 2014.9.4

Time to decline the regulated electricity tariff

Caijing, Vol 22, 2014

More (in Chinese mostly)……

Recent Events

Unraveling the Myth of China's Inadequate Renewable Utilization: Debunking the Misconceptions of "Provincial Protectionism", July 2023

China's hydropower is subject to repetitive fluctuations due to inadequate rainfall or extreme abundance, which is not related to the difficult-to-define and confirm "interprovincial barriers" narrative (irrelevance), even though such barriers may exist at the level of trading contracts. The problem lies in the intertwining of electricity trading and operations, where the lack of clear value rules in system operation results in submission to higher-level discretionary powers.
This kind of trading, determining physical output and flow, has been witnessed in the early stages of market-oriented reforms in many countries, but later the contracts tend to become financialized, eliminating the need for physical execution. For example, in 1996, the United States Federal Energy Regulatory Commission Order No. 888 clearly stated that a market based on tracing the flow of electricity between production and consumption is not feasible. Actual flow paths and contractual paths cannot be aligned.

See the details in https://www.inengyuan.com/kuaixun/11370.html (in Chinese)

Report release: The power capacity in China is sufficient, or not?

September 15, 2022

The full report here: Chinese version; in English (brief version).

According to a new study entitled "Building a "New Electricity System" and Capacity Adequacy - An Empirical Analysis of Available Generation Resources at Times of High Demand", jointly published by the Draworld Environmental Research Center (Beijing) and the Center for Energy and Clean Air Research (CREA), compared to building new power sources, including coal-fired ones, enhancing inter-provincial cooperation between China's power grids to achieve a greater balance between supply and demand than at the provincial level will not only further ensure system adequacy, but will also have significant emission reduction and economic benefits.

Policy briefing
To maintain the power system adequacy: the sequential rational measures before the new coal power as the last resort

May, 2022

System adequacy status needs to be monitored and made more transparent on an annual basis. Similar to the European and North American Reliability Councils, it is recommended that the government regulator (NEA's Department of Market Regulation) conduct special regulation on system adequacy transparency and require system operator to prepare and make public system adequacy reviews (Retrospect) and system adequacy forecasts (Forecast) on an annual basis. These reports serve as a reference for system capacity expansion. In particular, it is necessary to introduce the ELCC (The effective load-carrying capacity) concept and methodology to characterise and measure the system reliability capability of stochastic wind and PV.

Kick-off: the new column series "Embrace the carbon neutrality" at Energy Magazine

July 4, 2021

What this column seeks to provide is a logical and self-consistent reflection and discussion from multiple perspectives/frameworks. Different disciplines and different people often discuss the same issue in very different ways. The author's goal is not to "hold the public hostage" by resorting to ideological awareness or initiatives to form a collective consensus or belief, but rather to develop a system of value criteria for evaluating the reasonableness of carbon neutrality, and to clarify what kind of emission reductions are desirable, what kind of reductions are less reasonable, and what kind of reductions are completely unacceptable. After all, the goal of carbon neutrality by 2060 requires a steady step-by-step effort, not a "one-stop-shopping" campaign. A more daring goal would be to predict a future that is still in a stochastic state, and how to transition from the present to the future.

Thank you, readers. Let's start a 2-4 year (to 2025) journey together to explore the issue of carbon neutrality. If all goes as expected, the content of this column will be reorganised, proofread, and updated in 2023-2024 into a book titled Carbon Neutral Fate: Six Approaches to Embrace Carbon Neutrality (tentative).

Joint workshop with China Dialogue: interpret and prescribe its 14th FYP in light of 2060 carbon neutrality vision

April 28, 2021

China has already pledged to become carbon neutrality by 2060, which is vital to global environment security. How to embrace it is literally being outlined in various levels of governments and society. We provide our first-kind reflection with examples related to energy targets, policy measures and transition governance in China. This joint-workshop with China Dialogue depicts the common and specific challenges of China to approach the target along the dimensions of effectiveness, efficiency and fairness. Recognizing the risky Stalinism-prone objective-achieving mode, we propose tailored policy toolkit based on four types of economic ideas to facilitate the ideal transition.

Report release: China Nationally Determined Contribution and Domestic 14th Power Five-Year-Plan

Nov.20, 2020

This report presents that industry plans to build new coal-fired power plants after 2020 contradict China’s 2060 carbon neutrality target. This report calls for China to initiate a policy process to phase out coal-fired power plants. At the same time, the rate of wind and solar power expansion needs to double over the next ten years to fulfil domestic targets to reduce greenhouse gas emissions. Short- and medium-term plans to decarbonise the power sector before 2050 are essential to achieve China’s much-lauded objective for carbon neutrality by 2060.

Find both of the English and Chinese version here, and here.

Organisational structure change since 2020s

Feb.5, 2020

In a fast-evolving world, we have changed our organisational structure accordingly in the inception of 2020, towards more internationalised development and efficient organisation. By now, we have two boutique groups working:

Digitalisation of the energy sector in the context of China.
The nexus of China with the other world.

We will continuously put our efforts to accomplish our commitments to our funders, peers and beyond.

Milestone article on China's power system and power market: united market is key

Available at: http://shupeidian.bjx.com.cn/news/20180525/900649.shtml

Kick-off: Study on optimal fossil fuel power generation mix and market price based on residual load duration curve, sponsored by China's National Energy Administration (NEA), 2017-2019

Report published: Multi-benefits of wind/Solar PV power development in China, funded by Greenpeace, April, 2017

Jointed with China's several authoritative research bodies in energy and environment filed, this report gave a synthesis on the integrated benefit to expand renewable in the electricity and energy sector. The benefit in energy, local pollution mitigation, green job and sustained economic growth are emphasized.

Retreat of Draworld Centre, July, 2016 successfully implemented

Energy sector critical to the climate mitigation, interviewed by China Sci & Tech Newspaper, Dec. 2015

China takes a leading role in the technology learning and cost decline, thanks to the sufficient manufacturing capability, and lower prices of primary factors. The technology cooperation and spillover between countries should be strengthened.

Carbon Emissions Peak: Non-fossil fuel share target as a sufficient condition

On September 21, 2015, Chief Energy Economist of DERC, Shawn Zhang accepted an interview with China Business Journal about subsidies for renewable energy in China. He mentioned that, the 20% target of non-fossil fuel share is a sufficient condition for CO2 emissions peak by 2030. Renewable energy, especially 200 GW of installed wind energy capacity and 150 GW of installed PV energy capacity, expected in the 13th Five-Year Plan is of importance for fulfilling the international commitment.

Fears over surge in dam construction

On July 6, 2015, Chief Energy Economist of DERC, Shawn Zhang had an interview with Financial Times about China’s 2030 climate targets and large-scale build-out in hydropower dams. He said, distorted pricing policies that reduce electricity costs in politically-important cities further complicate any effort to analyze the real cost of the dams; it is common to realize that the cost of electricity generation is not the same as the cost of using that electricity.

Presentation on the workshop of "Clean coal utilisation in China"

On August 15, 2014, Chief Energy Economist of Draword, Shawn Zhang speak at the workshop, titling "International coal market and policy and interactions with China's market: short-term and medium to long term factors.

Hot discussion arising from the publication of Draworld on Caijing

Time to decline the regulated electricity tariff, published in Caijing, August 4, 2014, stimulating the discussion of China's tariff system in public.

Good to coal sector from reduced electricity tariff: Interviewed by China Economic Herald

Reduced tariff can lift the demand for coal, and will benefit the coal sector currently in deficit condition.