Stanford University

New PESD research examines China's efforts to remake its coal and power sectors

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China's coal market is now in the midst of a radical restructuring that has the potential to change how coal is produced, traded and consumed both in China and the rest of the world.  The restructuring aims to integrate the coal and power sectors at giant "coal-power bases" that combined would churn out more coal annually than all the coal produced in the entire United States. 

Coal-power integration is now a focal point of the Chinese government's energy policy, driven by the dramatic "coal-power conflict".  Coal prices are market-based, but power prices are tightly controlled by the government.  This has caused massive losses for Chinese power generators in 2008 and 2010 and triggered government intervention in the coal market with attempts to cap the price of coal.  The pervasive conflict between coal and power is now driving the Chinese government to remake these markets.

Coal-power base policy aims to establish upwards of 14 major coal-power bases, each producing over 100 mt of coal with consuming industries on-site.  The plan envisions that roughly half of China's coal production would be produced at a handful major coal-power base sites that are controlled by key state-owned enterprises (SOEs) and the central government.    

PESD's new research analyzes China's coal-power base reforms and how they will impact Chinese and global coal markets.

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Prospects and Bottlenecks for Clean Energy Cooperation

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The Center for Northeast Asian Policy Studies and the Economic Research Institute for Northeast Asia (ERINA) will host a seminar on the potential areas of cooperation between the U.S., Japan, and China on developing clean coal technology and clean energy markets and policies titled, "Developing Clean Energy Markets: Toward China-Japan-U.S. Trilateral Cooperation" on October 25, 2010.

Researcher He will be participating in the Prospects and Bottlenecks for Clean Energy Cooperation portion of the seminar.

Event Summary from Brookings

In recent years, the United States and China have engaged in high-profile discussions and collaborated on various aspects of clean energy. The United States and China have also separately worked with Japan. However, these nations-the world's three largest economies and three of the four largest energy consumers-have not worked together in a trilateral format.

On October 25, the Center for Northeast Asian Policy Studies at Brookings and the Economic Research Institute for Northeast Asia hosted a seminar featuring presentations by experts from Japan, China, and the U.S. Panelists will describe existing bilateral cooperation on developing clean energy markets and policies, and will illuminate opportunities for truly trilateral cooperation, especially in the areas of energy efficiency and clean coal.

After each panel, the speakers took audience questions.

More information about this event on www.brookings.edu

Falk Auditorium
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

Gang He

616 Serra St.
E420 Encina Hall
Stanford, CA 94305

(650) 725-4249 (650) 724-1717
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Research Associate
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Gang He's work focuses on China's energy and climate change policy, carbon capture and sequestration, domestic coal and power sectors and their key role in both the global coal market and in international climate policy framework.  He also studies other issues related to energy economics and modeling, global climate change and the development of lower-carbon energy sources. 

Prior to joining PESD, he was with the World Resources Institute as a Cynthia Helms Fellow.  He has also worked for the Global Roundtable on Climate Change of the Earth Institute at Columbia University. With his experiences both in US and China, he has been actively involved in the US-China collaboration on energy and climate change. 

Mr. He received an M.A. from Columbia University on Climate and Society, B.S. from Peking University on Geography, and he is currently doing a PhD in the Energy and Resources Group at UC Berkeley.

Gang He Panelist
Seminars

PESD Director Frank Wolak travels to the White House for the Energy Innovation Conference

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Leaders from different sectors came together this past Friday to tackle the challenges of transforming the way we produce and consume energy, as well as discussing ways of supporting small businesses and entrepreneurs in the energy sector.

The Energy Innovation Conference was a partnership of the White House, federal agencies, businesses, and the Kauffman Foundation, to address how to advance innovations in (clean) energy.

 

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Regulatory Barriers to Lowering the Carbon Content of Energy Services

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A preliminary list of regulatory barriers that restrain the commercialization of technologies that would reduce the carbon content of energy services consumed in the United States.

At the request of the Kauffman Foundation, PESD director Frank Wolak compiled a list of state and local regulatory barriers that restrain the commercialization of technologies that would reduce the carbon content of energy services consumed in the United States.

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Policy Briefs
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Program on Energy and Sustainable Development
Authors
Frank Wolak
Frank Wolak

India and Climate Change

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UCLA School of Law
Los Angeles, California

Varun Rai

616 Serra St.
Encina Hall E419
Stanford, CA 94305

(650) 724-1714 (650) 724-1717
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Research Fellow
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Varun's research focuses on technologies and policies for carbon capture and storage (CCS), technological innovation and diffusion, and the technology and energy policy of India. He leads the carbon capture and storage (CCS) research at PESD.
 
He received his Ph.D. and MS in Mechanical Engineering from Stanford with specialization in energy systems and technologies. He holds a Bachelor's degree in Mechanical Engineering from the Indian Institute of Technology (IIT) Kharagpur.

Varun Rai Panelist
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Carbon Capture and Storage (CCS): Creating a Framework for U.S.-China Cooperation on Climate and Energy

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PESD researcher Gang He is invited to the Asia Society and Center for American Progress's roundtable Carbon Capture and Storage (CCS): Creating a Framework for U.S.-China Cooperation on Climate and Energy to discuss core policy, financing, and technological and intellectual property rights questions that need to be addressed between China and the U.S. over a commercial-scale, demonstration CCS plant in China.

This joint initiative by Asia Society and the Center for American Progress aims to bring together key stakeholders for a lively discussion with the objective of producing a document that lays the framework for both countries to cooperate on the joint research, development and deployment of one or more pilot CCS facilities in China.

Center for American Progress
1225 Eye Street NW 3rd Floor
Washington D.C., 20001

Gang He

616 Serra St.
E420 Encina Hall
Stanford, CA 94305

(650) 725-4249 (650) 724-1717
0
Research Associate
Gang.jpg

Gang He's work focuses on China's energy and climate change policy, carbon capture and sequestration, domestic coal and power sectors and their key role in both the global coal market and in international climate policy framework.  He also studies other issues related to energy economics and modeling, global climate change and the development of lower-carbon energy sources. 

Prior to joining PESD, he was with the World Resources Institute as a Cynthia Helms Fellow.  He has also worked for the Global Roundtable on Climate Change of the Earth Institute at Columbia University. With his experiences both in US and China, he has been actively involved in the US-China collaboration on energy and climate change. 

Mr. He received an M.A. from Columbia University on Climate and Society, B.S. from Peking University on Geography, and he is currently doing a PhD in the Energy and Resources Group at UC Berkeley.

Gang He Speaker
Workshops

Upstream vs. Downstream CO2 Trading: A Comparison for the Electricity Context

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In electricity, "downstream" CO2 regulation requires retail suppliers to buy energy from a mix of sources so that their weighted emissions satisfy a standard. It has been argued that such "loadbased" regulation would solve emissions leakage, cost consumers less, and provide more incentive for energy efficiency than traditional source-based cap-and-trade programs. Because pure load-based trading complicates spot power markets, variants (GEAC and CO2RC) that separate emissions attributes from energy have been proposed. When all energy producers and consumers come under such a system, these load-based programs are equivalent to source-based trading in which emissions allowances are allocated by various rules, and have no necessary cost advantage. The GEAC and CO2RC systems are equivalent to giving allowances free to generators, and requiring consumers either to subsidize generation or buy back excess allowances, respectively. As avoided energy costs under source-based and pure load-based trading are equal, the latter provides no additional incentive for energy efficiency. The speculative benefits of load-based systems are unjustified in light of their additional administrative complexity and cost, the threat that they pose to the competitiveness and efficiency of electricity spot markets, and the complications that would arise when transition to a federal cap-and-trade system occurs.

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Publication Type
Working Papers
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Energy Institute at HAAS
Authors
Benjamin F. Hobbs
James Bushnell
Frank Wolak
Frank Wolak

Why the United States has yet to Benefit from Electricity Industry Re-structuring

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Frank Wolak discusses restructuring of the electricity industry in the U.S. using examples from California and explains the problems involved in energy market design.

Building 420, Room 40

Frank Wolak

Stanford University
Economics Department
579 Jane Stanford Way
Stanford, CA 94305-6072

(650) 724-1712 (650) 724-1717
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Senior Fellow at the Freeman Spogli Institute for International Studies
Holbrook Working Professor of Commodity Price Studies in Economics
Senior Fellow, by courtesy, at the Stanford Institute for Economic Policy Research
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MS, PhD

Frank A. Wolak is a Professor in the Department of Economics at Stanford University. His fields of specialization are Industrial Organization and Econometric Theory. His recent work studies methods for introducing competition into infrastructure industries -- telecommunications, electricity, water delivery and postal delivery services -- and on assessing the impacts of these competition policies on consumer and producer welfare. He is the Chairman of the Market Surveillance Committee of the California Independent System Operator for electricity supply industry in California. He is a visiting scholar at University of California Energy Institute and a Research Associate of the National Bureau of Economic Research (NBER).

Professor Wolak received his Ph.D. and M.S. from Harvard University and his B.A. from Rice University.

Director of the Program on Energy and Sustainable Development
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