The effectiveness of China's wind power policy: An empirical analysis

Along with China's rapid industrialization and urbanization, challenges in reducing pollution and CO2 emissions are increasing. One of the major approaches to coordinate economic growth and environmental protection is to substitute coal-fired power with renewable energy. Since 2003, in order to promote wind power development, China has put in place many support policies which fall into either price policy category or non-price policy category. By using a variable intercept and mixed regression model with provincial panel data during 2001-2013, we analyzed the impacts of both categories on the increase of installed capacity in areas with different wind resources. We found that price policy and two non-price policies had positive impacts on the increase of wind power installation, price policy played a greater role than non-price policy did in promoting wind power development, and price policy was more effective in areas with poor wind resources, whilst non- price policy was more effective in areas with rich wind resources. Built on these findings, conclusions and policy recommendations are provided at the end of the paper.