Advancing sustainable growth in the United States and China

Paulson Institute Report Recommends Jing-Jin-Ji Region Become a Renewable Energy Integration Zone

Germany and Texas case studies show how it can be done


Beijing, China—The Paulson Institute today released a report entitled Going for Gold: Championing Renewable Integration in Jing-Jin-Ji. The report makes the case that the Beijing-Tianjin-Hebei region (or Jing-Jin-Ji) should be designated as a renewable energy integration zone.

Beijing and Zhangjiakou will co-host the 2022 Winter Olympics, Zhangjiakou has abundant wind and solar resources, and Beijing also has ambitions for a clean energy transition. Based on international case studies from Germany and Texas, the report argues that Jing-Jin-Ji has the potential to become a national model for renewable energy integration that raises the share of non-fossil energy used by the grid and improves air quality.

“Jing-Jin-Ji has the potential to play a tremendous leadership role in boosting renewable energy use and resolving curtailment – an issue that is critical to achieving China’s ambitious clean energy and emissions goals. Ensuring that clean energy from Zhangjiakou can reach all areas of Jing-Jin-Ji would also represent a tangible achievement of efforts to promote economic integration across this region,” said Paulson Institute Associate Director of Research Anders Hove, one of the authors of the report.

The report was released at a Power Sector Roundtable event co-hosted by the Paulson Institute and the Natural Resources Defense Council (NRDC), in collaboration with the National Energy Administration’s China National Renewable Energy Center and the National Development and Reform Commission Energy Research Institute’s Center for Renewable Energy Development.

As Beijing and nearby Zhangjiakou prepare to co-host the 2022 Winter Olympic Games, both are pursuing ambitious strategies to show progress on resolving air quality problems and showcase clean energy technology. To this end, Zhangjiakou has been named China’s first nationally designated renewable energy demonstration zone, with a goal of growing its solar and wind capacity to 50 GW by 2030, from 8 GW as of the end of 2015.

But the city is relatively small, with insufficient electricity demand to absorb all of its clean energy, and the report argues that current strategies for the demonstration zone – seeking to increase local electricity demand and attract energy-intensive industries – have the potential to work against China’s broader efforts to increase energy efficiency and cap total energy use by 2020.

Instead, the report recommends a different solution: going beyond Zhangjiakou to establish the much larger Jing-Jin-Ji region as a pilot renewable energy integration zone, explicitly linking renewable energy produced in Zhangjiakou with centers of high electricity demand such as Beijing and Tianjin, with a key goal of reducing “curtailment,” or wasted energy, which continues to be a severe obstacle to the transition to clean energy in Jing-Jin-Ji and across China.

China leads the world in renewable energy capacity and investment, but its energy production from these sources lags behind other countries. For example, in 2015 the United States produced more electricity from wind than China, though it has only 58% of China’s total connected wind capacity. From 2011 to 2015, the report notes, wind curtailment cost China’s energy sector RMB 51 billion and resulted in otherwise avoidable coal consumption of 430 million tons. According to the report, the examples of Germany and Texas suggest that 4-5 years is sufficient time for completing the investments and construction and policy changes needed to reduce renewable energy curtailment to as low as 1%. But achieving such a target will require a clear plan and timeline for action.

The report recommends that a pilot of renewable energy integration covering the entire Jing-Jin-Ji region should improve coordination of transmission planning with renewable power additions; test a regional spot market; and expand dispatch to allow renewable energy to reach all parts of the region.

The report builds on the Paulson Institute’s October 2015 report China’s Next Opportunity: Sustainable Economic Transition. This and other previous publications are all available for download at paulsoninstitute.org.

This is the third roundtable that NRDC and Paulson Institute jointly hosted with the common goal of supporting decarbonizing China’s power sector.

About the Paulson Institute
The Paulson Institute is a non-partisan, non-profit “think and do” tank grounded in the principle that today’s most pressing economic and environmental challenges can be solved only if the United States and China work in complementary ways. Our mission is to strengthen U.S.-China relations and to advance sustainable economic growth and environmental protection in both countries. Our programs focus on advancing the transition to more sustainable, low-carbon economic models in China and the United States through industrial transformation, sustainable urbanization programs, and environmental conservation. We also promote bilateral cross-border investment that will help create jobs and strengthen U.S.-China relations. Our Think Tank publishes prescriptive and analytical papers from leading scholars and practitioners on the most important macroeconomic and structural reform issues facing China today. Founded in 2011 by Henry M. Paulson, Jr., the 74th Secretary of the Treasury and former Chief Executive Officer of Goldman Sachs, the Institute is based in Chicago and has offices in Washington, San Francisco, and Beijing.

About the Natural Resources Defense Council
The Natural Resources Defense Council (NRDC) is an international environmental nonprofit organization with more than two million members and online supporters. Since 1970, our lawyers, scientists, and other professionals have worked to protect the world’s natural resources, public health, and the environment. NRDC works in the United States, China, India, Canada, Mexico, Chile, Costa Rica, and the European Union.

About the Power Sector Roundtable
In September 2015, NRDC launched the Power Sector Roundtable: The first of its kind, the Roundtable aims to provide an open and transparent platform for dialogue within a diverse group of policymakers, industry experts, enterprises, researchers and NGO representatives, joining efforts to propel China toward a decarbonized power sector.