China's distributed energy policies: Evolution, instruments and recommendation

Distributed energy (DE) is a way to cascade energy use near multiple users. It significantly impacts energy savings, emission reductions and energy structure upgrades. In recent years, all levels of the Chinese government have strived to introduce policies favorable to the implementation of DE. These policies have been affected by the timing of the introduction, regional economic differences, the degree of government attention, and many other complex factors. To clarify the development and links between these policies, this study summarizes and compares China's DE policies at national, provincial, and municipal levels, from 1989 to 2016. We analyze the scope and content of subsidies in detail, and then provide policy recommendations for DE development in China. The main results are as follows: (1) DE policies emerge from legal provisions in the areas of energy, electricity, and environmental protection. The policies have gradually evolved from macro-plans to specific guidance. (2) The demand for DE subsidies is increasing, making the back slope of subsidies significant under an insufficient government budget. Diverse subsidies are needed to address this contradiction. (3) Future policies should focus on comprehensive DE utilization, smart grids, research and development (R&D), and developing policy synergies at different levels.