Weeks ago, Prof. Michael Davidson, assistant professor at the School of Global Policy and Strategy and the Mechanical and Aerospace Engineering Department and Dean of the Power Transformation Lab at the University of California, San Diego was visiting Fudan University.
Renowned for his research in systems within emerging electricity markets and the engineering implications and institutional conflicts inherent in deploying low-carbon energy at scale, Prof. Davidson has organized several workshops on US-China relations and climate change with Fudan.
How does he view the climate issue and the work China has done in addressing climate change? Let's find out.
Q: What’s your research plan during the Fudan Fellow Program?
Davidson: My first effort is to plan for a third workshop on US-China relations, climate change and clean energy which we’re hoping to hold in San Diego. We’ve held two fruitful workshops before.
In term of research, there are several areas that my lab is exploring. We’re focusing on the geopolitics of clean energy supply chains, energy transitions, and power markets and reliability. For example, we have also done careful lookbacks on China’s power outages to analyze their causes and how to provide low-carbon solutions. We are also planning renewable energy development to find the best locations considering grid and land impacts to build wind and solar farms.
Q: What experiences or opportunities led you to focus your interest on research energy-related issues in China?
Davidson: My first exposure to China’s energy issues was as a Fulbright Fellow to Tsinghua in 2008. I had just learned some Chinese and was researching small-scale clean energy solutions in the countryside. Since then, I have worked on various topics related to energy and climate. Currently, about two-thirds of my work is related to China’s energy system.
Q: Do you see any trend with regard to energy issues throughout this time?
Davidson: One of the biggest trends in clean energy is the drastic reduction in costs. Since 2008, solar panels have become ten times cheaper, batteries about ten times cheaper, and wind energy 7-8 times cheaper, largely driven by Chinese firms and global supply chains. This has made clean energy more economical than coal in many regions of the world.
In China, there has been massive deployment of solar and wind energy, not only due to strong policy support but also because it is now very affordable to build. Last year, China deployed nearly 300 gigawatts of wind and solar, compared to the US pace of 40 gigawatts. This year, China is on track to deploy even more clean energy.
Q: In order to reduce China’s carbon emissions and achieve carbon neutrality on schedule, what are the most crucial measures needed?
Davidson: The electricity sector needs continued growth in renewable energy to meet targets through 2060. A significant shift is required in how coal is used, moving from a base load to a backup role. Market reforms are crucial to support this change. China, in the midst of a long transition towards electricity markets since 2015, now sells two-thirds of electricity through markets, a dramatic change from just a few percent a decade ago. However, more reforms are needed to create effective price signals and encourage renewable energy. Policies including renewable energy portfolio standards and updated laws are essential to incentivize continued growth in renewables and ensure progress toward 2060 targets.
Q: What do you think are the key characteristics of China’s emerging electricity markets, and how do they differ from those in other countries?
Davidson: China’s electricity markets are quite extensive. However, they differ from those in Europe and the US in some important ways. In China, most electricity is sold through medium to long-term contracts. They do reduce prices but don’t play well with renewable energy such as solar and wind, which are variable and hard to predict and therefore less compatible with fixed contracts.
To address this, China is piloting spot markets, but they still account for a small portion of electricity transactions.
There’s also a large amount of inter-provincial barriers to electricity trading. Provincial markets rarely interact with each other and negotiations between provinces can introduce inflexibility in the management of spatial variability of renewable energy resources. For example, the west and north have abundant wind and solar power, while demand is concentrated in the east and south. Right now, this mismatch is handled through rigid negotiated contracts. A unified national power market could resolve many of these issues, but setting it up will be challenging.
In comparison, although the US doesn’t have a single national market, it has seven regional power markets covering multiple state areas with coordination across large distances. Europe has a more integrated system with a regionwide electricity market, providing coordination across national borders.
Q: What sparked your connection with Fudan University, and what aspects of Fudan resonate with you the most?
Davidson: The Fudan-UC Center on Contemporary China is a unique partnership that has been going on for many years. We’ve had very open and productive research exchanges through this partnership.Two workshops were held on US-China relations and climate change, one in April 2023 and the other this year in May, and I have had very useful interactions with Fudan scholars through organizing those workshops. I wanted to come to China to push forward the planning for a third workshop on this topic.
Q: What do you think your experience as a visiting scholar at Fudan can provide for your future research?
Davidson: The really exciting thing that I work on here is discussing future prospects for efforts on climate change. Now we are entering a very difficult period for the relationship as well as for climate change in particular, so these kinds of dialogues are more important than ever in order to maintain some communication even when our governments may stop talking to each other in great substance.
Q: Do you find global progress on climate change mitigation to be satisfactory thus far?
Davidson: The climate change situation has improved since the Paris Agreement in 2015, with clean energy becoming cheaper and countries accelerating their efforts. There is still much to do, however, as deploying technology faces significant challenges, including geopolitical and regulatory hurdles. Future challenges, such as decarbonizing tough sectors, will also intensify. Still, young folks should be heartened, since we’re moving in the right direction. It’s important not to overreact to individual events or statements, but instead focus on tangible, on-the-ground changes.
Presented by Fudan University
