Dynamics of the power sector transition in China

Report

The transition to clean technologies in the power sector is fundamentally transforming energy systems, with important implications for electricity costs, carbon emissions, and security of supply. In this context of structural change, cause and effect are often disproportionate. This leads to surprises, which may be either beneficial or detrimental for policy objectives. Understanding the causal feedback loops in the system— reinforcing feedbacks that amplify change, and dampening feedbacks that inhibit change and preserve stability—can help to anticipate policies’ dynamic effects, and distinguish those that are self-amplifying from those that are selflimiting. The analysis of feedbacks can also help to identify ways in which combinations of policies are mutually reinforcing or mutually offsetting. China is undertaking the transition to clean power on an unmatched scale, and the UK is navigating it at an exceptional pace. While China is engaged in a process of electricity market liberalisation, the UK is considering a wide-ranging set of policy reforms centred around a liberalised wholesale market. Despite their different scales, starting points, and institutional structures, the two countries now face a similar set of challenges as they aim to adapt their power systems to new technologies. In this report, we use systems mapping with causal loop diagrams—an analytical technique focussed on feedback loops—to provide a new perspective on the dynamics of the power sector transition in China. Where relevant, we complement this with insights from the UK’s experience

Authors: Zhang, D; Collett, M; Sharpe, S; Grubb, M; Salmon, K

• Publication status: Published
• Publisher: S-Curve Economics CIC
• Place of publication: London, UK
• Publication date: 2025-05-30
• Language: English
• Keywords: China; power sector transition; systems mapping; UK