220 G. CHEN
With regard to the implementation of renewable energy policies at
local levels, it is subject to the interests of local governments and the
level of coordination between local governments and central government. The central government is responsible for policy regulation while
the local governments are in charge of policy implementation. Unlike
in the past when local levels used to be subject to a high degree of
control under central government, after the economic reform and transition from a planned economy to a market economy, such control
has been diminishing and local government has become more politically and economically independent. As they have their own interests
to pursue, they need tactically to strike a balance between developing
the local economy and serving as political agents for the central government. Sometimes, they prioritize local economic development and chose
non-compliance or partial-compliance with orders from central government. Sometimes the coordination between central government and local
governments has also been poor and it limits the efficiency of policy
implementation at local levels (Zhao 2001, p. 6). As local governments
have different priorities, sometimes they may justifiably reinterpret the
national policies and bundle them with more pressing issues that are of
greater importance to local development; sometimes they may actively
or passively obstruct the implementation of central government policy
when that policy is not in their interest of development; or sometimes it
is simply because the local government lacks the resources to implement
national policies (Meidan et al. 2009, p. 616).
China’s power industry, despite being increasingly competitive and
fragmented as a result of government-initiated structural reforms, is still
highly regulated by the state, with on-grid electricity tariffs, in most
cases still set by governmental regulators, being vital to profit margins
and even survival of various power generators. As compared to major
hydropower and nuclear power corporations that are state-owned behemoths subject to state plans and government edicts, wind and solar power
plants, mostly small and medium-sized generators with diverse ownership, are more sensitive to fluctuations in power pricing, production cost
and demand conditions. Government plans, which are more precise in
predicting future development trajectories of hydro and nuclear power,
often lag behind unexpected proliferation rates of wind and solar power
plants that face higher supply and demand elasticity under conditions of
government subsidies, feed-in tariffs and production cost slump.
With regard to the implementation of renewable energy policies at
local levels, it is subject to the interests of local governments and the
level of coordination between local governments and central government. The central government is responsible for policy regulation while
the local governments are in charge of policy implementation. Unlike
in the past when local levels used to be subject to a high degree of
control under central government, after the economic reform and transition from a planned economy to a market economy, such control
has been diminishing and local government has become more politically and economically independent. As they have their own interests
to pursue, they need tactically to strike a balance between developing
the local economy and serving as political agents for the central government. Sometimes, they prioritize local economic development and chose
non-compliance or partial-compliance with orders from central government. Sometimes the coordination between central government and local
governments has also been poor and it limits the efficiency of policy
implementation at local levels (Zhao 2001, p. 6). As local governments
have different priorities, sometimes they may justifiably reinterpret the
national policies and bundle them with more pressing issues that are of
greater importance to local development; sometimes they may actively
or passively obstruct the implementation of central government policy
when that policy is not in their interest of development; or sometimes it
is simply because the local government lacks the resources to implement
national policies (Meidan et al. 2009, p. 616).
China’s power industry, despite being increasingly competitive and
fragmented as a result of government-initiated structural reforms, is still
highly regulated by the state, with on-grid electricity tariffs, in most
cases still set by governmental regulators, being vital to profit margins
and even survival of various power generators. As compared to major
hydropower and nuclear power corporations that are state-owned behemoths subject to state plans and government edicts, wind and solar power
plants, mostly small and medium-sized generators with diverse ownership, are more sensitive to fluctuations in power pricing, production cost
and demand conditions. Government plans, which are more precise in
predicting future development trajectories of hydro and nuclear power,
often lag behind unexpected proliferation rates of wind and solar power
plants that face higher supply and demand elasticity under conditions of
government subsidies, feed-in tariffs and production cost slump.