Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 320: Public policy failures related to China´s Wind Power Development

Jonas Grafström ()
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Jonas Grafström: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden

Abstract: An anecdote about the failure of the Soviet economic system tells about a factory which were evaluated based on tons of nails produced – unsurprisingly the nails became heavy. China is currently hailed as the worlds primer wind power producer; however, a closer examination reveals a string of policy failure making the Chinese wind power development resemble the infamous Soviet nail example. From a technological transition perspective, policy failures in China's wind power program from 1980-2016 is documented and analysed. Five overarching topics are analysed including: Conflicting policies, quality problems, underwhelming technological development, lacking technological standards and insufficient grid transmission system. One conclusion is that when the Chinese government set a command and control target of how much new installed capacity that was going to be constructed the state utilities delivered to target but with an abundance of power plants without grid connectivity, severe quality problems and low technological development.

Keywords: China; Wind power; Economic Planning; Soviet; Technology; Energy

JEL-codes: E61; O32; Q28; Q58

21 pages, April 2, 2019

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