Over the past decade, wind and solar energy have entered a golden age in the world including China due to quickly declining cost, supportive policy, and improved market structures for renewable integration. In many countries, the power and energy sectors are undergoing a rapid transition, not only towards cleaner energy, but also towards more distributed and interactive energy consumption patterns. The revolution in energy consumption has been enabled by digitalization and customer-centered energy business models. By embracing this process and altering the old paradigm, China can achieve a cleaner energy system while ensuring power reliability, economic efficiency, political practicality, and social inclusiveness.
The China Star project provides a high-level perspective of how the different policy instruments and markets interact and contribute to a more efficient and reliable future energy system in China. In doing so, we argue for a pragmatic perspective that does not stick to textbook economic theory but rather acknowledges real-world experience. The analysis is intended to help focus the debate on key questions and implications that policy makers need to have in mind when designing future markets and regulations.