BSM109 on Campus 2016-2017

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Organisational Strategy and Leadership


The concerns for renewable energy have been drawn prominently due to the need for energy resources that are capable of providing supplies to the increasing demands of energy from the global population without impinging any detrimental consequences on the environment. Emphatic consideration for the management of waste has also been included in the reflections on sustainable energy development (Bloch, Rafiq & Salim, 2015, p 113). The implications for nuclear energy can be observed in the context of ethical principles thereby leading to drastic modifications in policies. The scope for energy sustainability was not realized previously and was largely associated with the volume of energy utilized by countries.

As per Bhattacharya et al, the requirement for energy sustainability has become an imperative concern due to the observation of consistent depletion in natural energy resources and the increasing ethical concerns arising in the context of global warming and other notable aspects. Sustainable energy development also draws viable rationale from the issues of safety which emphasizes on the acquisition of a broad and indefinite dimension to improve options accessible to future generations (Bhattacharya et al., 2016, p 735). However, the formidable influence of geopolitical questions has led to the ambiguities in case of energy security which also reflects on the affordability of the produced volumes of energy.

On the contrary, Goswami & Kreith said that it is essential to estimate the role of distinct elements of legal frameworks that define objectives for renewable energy management since the recently estimated reports of increasing involvement of countries in setting renewable energy objectives imply the support that can be acquired by countries from legal frameworks and policies about renewable energy (Goswami & Kreith, 2015). The gradual shift of the countries towards solar, wind, and geothermal sources of energy could be estimated as a viable opportunity for the consideration of the critical analysis of legal frameworks about renewable energy in the two countries.

As per Goswami & Kreith, the countries are selected in such a manner indicating the recent increase in the involvement of one country in renewable energy initiatives while the other country cites examples of setbacks in support of renewable energy. China has depicted substantial examples of increased involvement in renewable energy initiatives in the recent reports of the REN Global Status report while Spain has depicted potential setbacks in its solar energy production and storage dimension (Goswami & Kreith, 2015). The report illustrates the critical reflection of the legal frameworks for renewable energy management in China and Spain to identify cognizable threats and advantages that can be obtained from national or governance policies.

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China and the renewable energy sector:

As per Hua, Oliphant & Hu, before the illustration of the legal framework related to support for renewable energy in China, it is essential to obtain a concise interpretation of the existing measures for renewable energy. The reputation of China as the leading consumer and producer of coal in the year 2008 can be considered a formidable indication of the recognition of China in the global energy market (Hua, Oliphant & Hu, 2016, pp 1048).

The development of China’s renewable energy capacity can be accounted for by prominent statistics all over the world without any prominent improvement in the contributions of renewable energy sources to the overall energy consumption in the country. Some of the profound factors that could account for the decrease in the share of the total capacity of renewable energy in the total energy consumption could include the comparatively slower rate of hydroelectric or solar power generation as compared to the generation of power from fossil fuel (Li et al., 2015, pp 1071). Therefore, the preferences for fossil fuel electricity can be apprehended in the electricity generation frameworks of China profoundly leading to concerns for the limited progress of renewable energy capacity of China.

Without noticeable reforms, the production of electricity could lead to unwarranted increments in the amount of carbon emissions that can result in long-term detrimental consequences (Lewis, 2014). The initiatives of China to participate in renewable energy generation could be observed in the improvement of installed capacity for renewable energy by adding grid-connected renewable capacity by substantial margins. The renewable energy dimension in China alone accounted for 26% of the total installed electric capacity, 9% of total consumption, and 18% of the total generated amount of energy.

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The legal framework of China:

The comprehensive and ambitious strategy for renewable energy management in China could be observed over the last ten years. The implementation of legal guidelines and precedents can be assumed as one of the primary reasons why China is accounted as one of the fastest developing markets for renewable energy (Montoya et al., 2014, p 525).

The country has been able to acquire the support of varying instruments in the context of the electricity and thermal energy sector and for the renewable energy dimensions such as hydroelectric energy, biomass, and wind energy. The observed trends of increasing demand for energy as well as the developing investments in conventional power capacities could be critically analyzed concerning the existing renewable energy dimension to predict the minimal significance of renewable energy in the future electricity generation mix of China.

The production of renewable energy as estimated in 2009 suggested the contribution of renewable energy to the total electricity generation in China. China has established renewable energy objectives to improve the hydro renewable energy share to 3% in 2020 as compared to 1.3% in 2009 as well as technological developments involving goals about the capacity of renewable energy technology (Manzano et al., 2013, p 134). The proposed initiatives for the expansion of renewable energy production apparatus in China can be validated only through the consideration of reasonable legal apparatus.

According to Seetharaman et al, the strategic instruments that can be observed in the case of China’s renewable energy sector’s promotion reflect the use of legal frameworks as the guiding precedents. The clear and comprehensive renewable energy strategy of China is reflective of the significant influence of the emphasis on renewable energy production. The foremost legal regulation that could be analyzed concerning the strategic orientation of China’s renewable energy promotion is the Renewable Energy Law established in 2005 (Seetharaman et al., 2016, pp 1374). The law acts as a driver for the long-term prospects of renewable energy promotion and is primarily associated with the concerns of regulating the priority of renewable energy generation over energy generation from conventional sources as well as establishing renewable energy objectives.

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Furthermore, the Renewable Energy Law also accounts for the specific emphasis on supporting renewable energy generation from rural off-grid infrastructures as well as directing the National Energy Administration towards estimation of annual targets for the generation of renewable energy. The implications of the Renewable Energy Law are also directed towards moderation of the heating sector through improvements in the provision of solar thermal installations.  The support for renewable energy in China can be apprehended from the 11th and 12th Five-Year Plans which serve as strategic documents supporting RE which estimate the promotion of RE as an integral aspect of a knowledge-based economy and its implications in the promotion of growth and development of the renewable energy industry in the domestic domain (Quaschning, 2016). The implementation of strategies and goals about renewable energy in China has also been fostered by the provision of feed-in tariffs specifically for biomass energy generation, on-shore wind energy generation, and the utilization of photovoltaic apparatus.

As per Zhang, Zhou & Zhou, the nationwide implementation of feed-in tariffs can be associated with the considerably new implementation of the law. Apart from the legal support acquired in the form of policies, the formidable implications for capital subsidiaries and a diverse assortment of tax rebates and credits could be related to the other profound entities about legal implications for renewable energy in China (Zhang, Zhou & Zhou, 2014, pp 952).

Other national laws that could be considered impactful on the dimensions of the legal framework about renewable energy refer to the Laws on Resource and the Environment fabricated by the National People’s Congress dealing with the Water Law, The Environmental Impact Assessment Law, and the Land Management Law. The outcomes of the legal support schemes that have been implemented in the context of the renewable energy support scheme refer to the public competitive bidding and public investments as well as feasible opportunities for loans and financing to support the renewable energy production and sustenance infrastructures in China.

Tax credits complemented with the provision of Energy production payments could be apprehended as noticeable evidence for the legal support available in the domain of renewable energy in China. Renewable portfolio standards established as guidelines shall be assumed as formidable inferences from the appropriate monitoring of legal frameworks. The detailed measures implemented as a part of the Renewable Energy Law and the Feed-in Tariffs in three consecutive years from 2009 to 2011 could be validated based on the comparative analysis of indicators.

The establishment of new entities in the energy generation framework of China is regulated by the State Electricity Regulatory Commission (SERC) which is perceived as the ultimate authority in terms of financial and executive monitoring of RE. The frequency of introduction of revised tariffs and legal reforms has also created potential implications of fast-paced change in the production of renewable energy and increment in the contribution of renewable energy to the total volume of energy produced in the electricity generation mix of China. Therefore, it can be imperatively observed that the legal framework in China has been utilized functionally as a strategic element for accomplishing prolific objectives for renewable energy production and management (Zhang, Zhou & Zhou, 2014, p 952).

The centralized emphasis on the production of renewable energy and the introduction of viable guidelines to improve the contributions of the production and consumption of renewable energy in the legal framework reflects the positive inclination observed in the promotion of renewable energy consumption. The outcomes of the legal frameworks implemented for the case of renewable energy development in China can be realized profoundly in the administration of a wide assortment of renewable energy policies that allow impetus for the development of dissemination of renewable energy.

According to Manzano et al, one of the essential characteristics that can be perceived in the case of the highly regulated energy market in China with the presence of five dominant energy companies is the formulation of constructs for national authorities to implement political goals that complement the promotion of renewable energy (Manzano et al., 2013, pp 134). On the contrary, China also requires formidable consideration of issues such as the absence of formidable players in the market as well as lack of competition can lead to detrimental consequences such as increased cost of production and the observation of higher inefficiency in the Chinese renewable energy industry.

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Background of the renewable energy industry in Spain:

The estimated issue in the case of Spain’s renewable energy sector for the report could be observed in storage woes despite being a large producer of concentrated solar thermal power. The solar sector is facing considerable issues that could be impinged by the unprecedented government plan presented by the government (Montoya et al., 2014, p 525). Therefore the necessity for monitoring the impacts generated by the legal frameworks on the management of the renewable energy industry in Spain can be perceived clearly as a response to the declining trends of support for renewable energy in the policies and legal documents of Spain.

The legal modification introduced as a shock by the government is intended for taxation of the residential consumption of solar power as well as the removal of the metering payments for such systems. The observation of Spain’s decreasing involvement in the renewable energy industry can be estimated from the lack of wind capacity in the first half of 2015 which poses detrimental consequences for the accomplishment of the EU 2020 target established by Spain for renewable energy objectives. The notable setbacks that can be observed in the renewable energy sector of Spain could be derived from the implications of the latest draft of the Energy Reform Bill introduced by the government towards the requirement of additional financial investment as well as plans for improvement of installed capacity by 500MW (Li et al., 2015, pp 1071).

These factors create ambiguities among investors due to the lack of certain explanations related to returns that can be acquired from investments in renewable energy reforms. The observation of these outcomes leads to formidable depreciation of the attractiveness of Spain for global renewable energy markets thereby validating the necessity for critical evaluation of the existing renewable energy legal regime and the potential challenges and opportunities that would improve the formulation of strategies to improve renewable energy production and development in Spain.

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Legal regime for renewable energy in Spain:

Legal certainty and visibility of revenue that were provided by the conventional remuneration regime were associated with a prolific change in the renewable energy department in Spain since renewable energy sources accounted for more than 43% of the country’s total energy output. The concentrating solar power efficiency depicted by Spain is accountable for the possible reputation of the country to accomplish higher and more innovative prospects in the long-term operations of renewable energy installations and capacity.

The regulatory mechanism for renewable energy in Spain is primarily dependent on the Royal Decree which has been set out by the Cabinet to outline the financial and legal framework for the production of electricity according to a special scheme system.

The implementation of a new text for replacing the Royal Decree established in 2004 as a profound inclusion as an effort in the framework of energy policy commitments could be considered a notable contributor to the improvement in the prevalent use of clean, efficient, and domestic sources of energy (Hua, Oliphant & Hu, 2016, pp 1048). The support of the government for energy technologies could be perceived in the production of electricity under the special scheme that reflects on the accomplishment of long-term stability as well as the provision of opportunities to resolve the mid-term as well as long-term objectives of energy generation.

The new reforms in the Royal Decree are also reflective of the essential requirement of contributions in the realization of objectives according to the Renewable Energies Plan 2005-2010 as well as the objectives about renewable energy set by Spain at the community level. Royal Decree 661/2007 is a notable regulation about electricity production with explicit implications for feed-in tariffs included in the special scheme albeit except for solar photovoltaic cells (Goswami & Kreith, 2015). Other notable legal frameworks that can be related to the renewable energy industry are reflected in the Royal Decree 1578/2008 which was prepared by the Photovoltaic Industry Association, and the RDL 6/2009 which reflects on the measures for the energy sector. The special scheme under the Royal Decree is also accountable for the collection of reasonable remuneration that could be related to the energy generated in the installations as per the special scheme.

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The provisions that are introduced in the legal constructs related to renewable energy production and management are largely reflective of minimally retroactive results. The subsequent modifications in the tariffs and surcharges established in the proposal are subject to the objectives for renewable energy established by Spain and the impact on units that have been already commissioned in the renewable energy sector.

The domain of renewable energies is subject to the impact of the special scheme in the new regulation particularly in the context of returns that have been accounted for a responsible assignment of average yields from the wind and hydraulic installations and the variability of options for operators to alter their yield upon participating in the electricity production market. The regulation is also accountable for extra support to the sectors characterized by minimal development such as biogas, biomass, and thermoelectric solar energy.

The support schemes which are facilitated for the generation of electricity from renewable sources obtain major implications for the price regulation system. The plant operators have distinct options for an assured feed-in tariff and the guaranteed bonus that is to the paid alongside the price for the generated electricity in the wholesale market. The price regulation system also derived inferences from the Royal Decree (Goswami & Kreith, 2015). The approval of reforms in the Royal Decree to introduce regulation for the premium tariff to support the novel construction of biomass plants that can be located in the mainframe electricity system as well as the existing or new wind energy generation plants.

The identification of the value for different compensation parameters in the context of the RE generation plants could be identified as a formidable highlight of the premium tariff or the novel remuneration regime. However, the issues that lead to setbacks for Spain’s growth in the renewable energy domain could be observed from the grid issues and policy-related issues arising from legal complicacies. The renewable energy plants in Spain are mandatorily obliged to the priorities for access, connection, and utilization of the grid while the assignment of priority to renewable energy by distributors alongside stability and security of the grid infrastructure. The use and development of grid management applications could also involve concerns about the contractual obligations of operators regarding the expansion of plans. Therefore operators are required to bear the cost of expansion changes to establish the connection of the plant to the grid.

The grid operators are also required to comply with the legal obligations of general legislation about energy generation which could create concerns for limitations of the attractiveness of investors as well as grid operators in the advancement of the existing installations for renewable energy generation. The promising aspect that can be noticed in the policy framework of Spain and its regulatory mechanisms about renewable energy generation is the national training system implemented by Spain for installers as well as the legal obligations for certification in the solar thermal panels (Montoya et al., 2014, pp 525). The implications that can be derived from the comprehensive R&D plans as well as the building code for the establishment of new plants could be leveraged to address the pitfalls observed in the promotion of renewable energy in the event of recent regulatory changes.

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The report illustrated a comparative representation of the legal frameworks of two different countries in the context of renewable energy generation, distribution, and storage. The cases of China and Spain have been used for the report to obtain contrasting outcomes since the former’s involvement in the domain of renewable energy has improvised in recent years while the latter has shown cognizable depreciation in the same dimension.


Bloch, H., Rafiq, S. and Salim, R., 2015. Economic growth with coal, oil and renewable energy consumption in China: Prospects for fuel substitution. Economic Modelling, 44, pp.104-115.

Bhattacharya, M., Paramati, S.R., Ozturk, I. and Bhattacharya, S., 2016. The effect of renewable energy consumption on economic growth: Evidence from top 38 countries. Applied Energy, 162, pp.733-741.

Goswami, D.Y. and Kreith, F. eds., 2015. Energy Efficiency and Renewable Energy Handbook. CRC Press.

Hua, Y., Oliphant, M. and Hu, E.J., 2016. Development of renewable energy in Australia and China: A comparison of policies and status. Renewable Energy, 85, pp.1044-1051.

Li, C., Shi, H., Cao, Y., Wang, J., Kuang, Y., Tan, Y. and Wei, J., 2015. A comprehensive review of renewable energy curtailment and avoidance: a specific example in China. Renewable and Sustainable Energy Reviews, 41, pp.1067-1079.

Lewis, J.I., 2014. The rise of renewable energy protectionism: Emerging trade conflicts and implications for low carbon development. Global Environmental Politics.

 Montoya, F.G., Aguilera, M.J. and Manzano-Agugliaro, F., 2014. Renewable energy production in Spain: A review. Renewable and Sustainable Energy Reviews, 33, pp.509-531.

 Manzano-Agugliaro, F., Alcayde, A., Montoya, F.G., Zapata-Sierra, A. and Gil, C., 2013. Scientific production of renewable energies worldwide: an overview. Renewable and Sustainable Energy Reviews, 18, pp.134-143.

 Seetharaman, A., Sandanaraj, L.L., Moorthy, M.K. and Saravanan, A.S., 2016. Enterprise framework for renewable energy. Renewable and Sustainable Energy Reviews, 54, pp.1368-1381.

 Quaschning, V., 2016. Understanding renewable energy systems. Routledge

Zhang, M., Zhou, D. and Zhou, P., 2014. A real option model for renewable energy policy evaluation with application to solar PV power generation in China. Renewable and Sustainable Energy Reviews, 40, pp.944-955.

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