Game And Regulation: Government Action In The Chinese Wind Power Industry Research

Like other countries in the world, China's wind power industry is the key factor of renewable energy development strategy. After years of development, China's installed capacity of wind power has become the lagest in the world, taking high-speed growth of new installed capacity. Beyond the rapid development, there are still difficulties in wind power's parallel in grid and technological breakthroughs. The paper, taking the angle of government behavior, basing on the theory tools including the government economic theory, institutional economics, public choice theory and economics of regulation, will conduct in-depth analysis and conclude meaningful advice of wind power development, considering the behavior of local governments, central-local government game and corporation behavior in wind power industry.This article analyzes both the supply and demand aspects. From the supply point of view, on the one hand, factors such as cash in subsidies, regional economic scale and to earn tax revenue, will stimulate local goverments to give the highest priority to wind power industry. The deep-seated reasons include GDP based performance evaluation mechanism, official promotion mechanism and fiscal decentralization. On the other hand, the major part of the wind turbine manufacturers and power suppliers are state-owned enterprises, which promote the development of wind energy industry, this national call, aiming at the increase of enterprise scale, profits, future earnings and political capital. Meanwhile, with the soft budget constraint, the investment behaviors of state-owned enterprises pay more attention to political interests rather than economic benefits. Variety of interests promote the investment behavior of the state-owned enterprises in wind power, reflecting their wonderful expectations on wind power industry.From the demand perspective, power grid enterprise as the immediate demander of wind power, determines the wind power's combination to the grid. Relative to the rapid size expansion of wind power, the backward condition of power grid construction restricts the development of wind power. On the one hand, due to intermittent, volatility and randomness characteristics, wind power means a great power safety hazard. It needs substantial adjustments to the grid peaking, scheduling and management system, adding enormous cost to the grid company, which reduces its positiveness; On the other hand, the power grid enterprise is natural monopoly and public welfare company. While using the monopoly power to obtain a bilateral monopoly profits, the company also pursues political interests. By expanding the enterprise's scale, improving the network coverage, enhancing the power grid monopoly, the company pursues to increase their political voice and monopoly power. As for wind power, a national support clean energy, the grid enterprise takes an active attitude, though not positive so much, not ruling out its opportunistic behavior to seek other objectives under the name of developing wind power. For this reason, we must require power grid company to amplify its public welfare nature, while developing wind power, to take the relevant costs and ease the burden of the general public.Learning the world's leading countries'development experience of wind power, government is the major contributor to the development of the renewable energy industry. First, the strong support of R & D is the driving force of industrial development; Secondly, government provides continuous tax relief, incentives and financial support to the development of renewable energy; Thirdly, through the market mechanism to solve the power consumption, transaction, quotas and other issues, the government effectively enhances the grid's absorptive capacity of wind power; Fourthly, the government uses mandatory access policy to force power grid enterprise to purchase renewable power. These measures are worthy of reference.Finally, the paper proposes to use the coercive power of the central government to regulate the behaviors of local governments and state owned corporations, to obtain the scientific development strategy and countermeasures of wind power and other renewable energys. First, local governments must clear their roles of rules developer, monitor and arbiter, assessing the amount of combined wind power, coordinating the interests of both the wind power supply and demand, promoting the development of local wind power technology. Second, the central government should strengthen the budget constraints of state-owned enterprises, improve their investment efficiency, and introduce market competition to break the monopoly. Again, the central government needs to develop wind power and other renewable energys basing on overall energy strategy of China and make specific development plans, taking R & D as a driving force, policy support as the protection, scientifically and orderly development as the objective.