Energy Transition

Projecting the future energy mix nationally and globally, and prospects for different sectors and technologies

The world’s growing appetite for energy, combined with concern about the risks of climate change, is leading nations to seek a technology mix that simultaneously lowers greenhouse gas (GHG) emissions and enables economic growth. The search for affordable, reliable, efficient, low‑carbon energy-at-scale involves a realistic assessment of the benefits and constraints of existing and new technologies, as well as their socioeconomic implications.

Recent policy in China targets an increase in the contribution of natural gas to the nation's energy supply. Historically, China's natural gas prices have been highly regulated with a goal to protect consumers. The old pricing regime failed to provide enough incentives for natural gas suppliers, which often resulted in natural gas shortage. A new gas pricing reform was tested in Guangdong and Guangxi provinces in 2011, and introduced nationwide in 2013. The reform is aimed at creating a more market-based pricing mechanism. We show that a substantial progress toward a better predictability and transparency of prices has been made. The prices are now more connected with the international fuel oil and liquid petroleum gas prices. The government's approach for a temporary two-tier pricing when some volumes are still traded at old prices reduced a potential opposition during the new regime implementation. Some limitations of the natural gas pricing remain as it created biased incentives for producers and favors large natural gas suppliers. The pricing reform at its current stage falls short of establishing a complete market mechanism driven by an interaction of supply and demand of natural gas in China.

Summary 

Wind power generation has doubled in Australia in the last 5 years, and is expected to grow rapidly in the coming decades.  It now meets 3.4% of Australia’s energy demand, and this percentage is predicted to increase to 12% by 2030.  But expanding the nation’s wind power capacity in a way that maximizes reliable power generation is a major challenge.

In this report, researchers at the MIT Joint Program studied the viability of different geographical regions for wind farms in Australia.  They established the distribution of the wind resource across the continent, measuring its strength, variabilty and intermittency, using a number of relevant measures that have not been used before to assess the regional-scale wind resource.  The analysis used data from MERRA, a NASA project that integrates data from satellites and other observations, to reconstruct the wind resource from 1979 to 2009.

They then used the wind distribution data to determine if wind power could be aggregated, or spread over several farms across many locations. Aggregating wind power in this way creates a more reliable power source, because when wind dies down at one wind farm, another farm where the wind is still blowing can continue to provide power.

The reconstructions of the wind resource show the strongest winds in the western and southern parts of the continent. Although it is strong, wind in this area is intermittent and farms are far from population centers in the east. Further, the intermittency of the wind in the southwest of the continent is spatially distributed such that the aggregation of the wind resource over large areas will not result in a significantly more reliable wind resource. These factors combine to make this area of Australia a relatively unattractive location for large-scale wind farm development.

In comparison, in eastern Australia the wind resource is weaker at broad scales, but is more constant. Aggregating wind farms in this area produces a greater benefit in terms of mitigating intermittency of the wind resource, providing a more reliable and therefore more economically viable resource in eastern Australia.

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