technologies due to uncertainty over investment
returns on electrified products. Consumers may
prefer gas or biomass options. Investment and
behavioural barriers can be overcome through
the following policies:
• apply stable and consistent tax benefits and
subsidies to consumers and suppliers across
energy carriers;
• maintain a credible electrification policy to
mitigate investor uncertainty and spur
investment;
• build product networks to encourage the formation of liquid secondary markets for assets
associated with electrified processes to reduce
asset resale uncertainty; and
• increase support for energy service companies to encourage heat pump uptake during
building and industry retrofits.
In terms of innovation, private companies and
individuals are often unwilling to invest resources in underdeveloped technologies. Innovation
support is required to reduce technology costs
and increase electrification in more challenging
subsectors:
• increase tax benefits and direct expenditure
for research, innovation and demonstration;
• develop R&D ecosystems and support learning by doing to facilitate technology
transition from laboratories to product commercialisation; and
• focus innovation support on areas with substantial electrification potential (shipping,
heavy-duty trucks, aviation).
6.6 Conclusion
Electricity is almost a quarter of China’s final
energy demand. China has already proved its
capacity to electrify rapidly, and electricity could
meet almost half of final energy demand by 2050.
China’s electrification rates are comparable to
many OECD economies.
As the country grows, with consumers
demanding higher quality energy carriers, and
technology and structural shifts drive further
changes, historical experience suggests that driven by these macroeconomic factors, China’s
electrification rate could increase from 23%
today to 32% in 2050.
Decarbonisation will further drive the process.
A high uptake of electric vehicles in transport
and heat pumps in buildings could increase
China’s electrification rate to 40–48% in 2050.
To achieve this, policymakers may wish to
implement a range of policy packages to overcome increased peak load variability, underdeveloped networks, investment and behavioural
barriers and innovation constraints.
Open Access This chapter is licensed under the terms of
the Creative Commons Attribution 4.0 International
License
(http://creativecommons.org/licenses/by/4.0/),
which permits use, sharing, adaptation, distribution and
reproduction in any medium or format, as long as you
give appropriate credit to the original author(s) and the
source, provide a link to the Creative Commons license
and indicate if changes were made.
The images or other third party material in this chapter are
included in the chapter’s Creative Commons license,
unless indicated otherwise in a credit line to the material.
If material is not included in the chapter’s Creative
Commons license and your intended use is not permitted
by statutory regulation or exceeds the permitted use, you
will need to obtain permission directly from the copyright
holder.
Special Report 2: Research on China’s Energy Demand Revolution
285
returns on electrified products. Consumers may
prefer gas or biomass options. Investment and
behavioural barriers can be overcome through
the following policies:
• apply stable and consistent tax benefits and
subsidies to consumers and suppliers across
energy carriers;
• maintain a credible electrification policy to
mitigate investor uncertainty and spur
investment;
• build product networks to encourage the formation of liquid secondary markets for assets
associated with electrified processes to reduce
asset resale uncertainty; and
• increase support for energy service companies to encourage heat pump uptake during
building and industry retrofits.
In terms of innovation, private companies and
individuals are often unwilling to invest resources in underdeveloped technologies. Innovation
support is required to reduce technology costs
and increase electrification in more challenging
subsectors:
• increase tax benefits and direct expenditure
for research, innovation and demonstration;
• develop R&D ecosystems and support learning by doing to facilitate technology
transition from laboratories to product commercialisation; and
• focus innovation support on areas with substantial electrification potential (shipping,
heavy-duty trucks, aviation).
6.6 Conclusion
Electricity is almost a quarter of China’s final
energy demand. China has already proved its
capacity to electrify rapidly, and electricity could
meet almost half of final energy demand by 2050.
China’s electrification rates are comparable to
many OECD economies.
As the country grows, with consumers
demanding higher quality energy carriers, and
technology and structural shifts drive further
changes, historical experience suggests that driven by these macroeconomic factors, China’s
electrification rate could increase from 23%
today to 32% in 2050.
Decarbonisation will further drive the process.
A high uptake of electric vehicles in transport
and heat pumps in buildings could increase
China’s electrification rate to 40–48% in 2050.
To achieve this, policymakers may wish to
implement a range of policy packages to overcome increased peak load variability, underdeveloped networks, investment and behavioural
barriers and innovation constraints.
Open Access This chapter is licensed under the terms of
the Creative Commons Attribution 4.0 International
License
(http://creativecommons.org/licenses/by/4.0/),
which permits use, sharing, adaptation, distribution and
reproduction in any medium or format, as long as you
give appropriate credit to the original author(s) and the
source, provide a link to the Creative Commons license
and indicate if changes were made.
The images or other third party material in this chapter are
included in the chapter’s Creative Commons license,
unless indicated otherwise in a credit line to the material.
If material is not included in the chapter’s Creative
Commons license and your intended use is not permitted
by statutory regulation or exceeds the permitted use, you
will need to obtain permission directly from the copyright
holder.
Special Report 2: Research on China’s Energy Demand Revolution
285