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Dialectical view and effective solution to the energy "impossible triangle" problem


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2024-03-25

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Dialectical view and effective solution to the energy

Energy is the basis and guarantee for economic and social existence and development, an important driving force for civilization and progress, and has a bearing on the national economy, people's livelihood and national security.

Energy development has been accompanied by security (safe and stable supply), economy (feasibility, accessibility, low price), cleanliness (environmental protection, environmental friendliness, clean and low carbon) and other issues. For these three issues, industry insiders have introduced the "impossible triangle" theory in the field of financial policy, believing that energy security and stability, low prices, and clean and low-carbon cannot be achieved at the same time, that is, an energy system cannot meet these three requirements at the same time., And call this phenomenon the energy "impossible triangle". How to dialectically view and effectively solve the energy "impossible triangle" problem, isEnergy TransitionThe realization of the two-carbon goal is an important issue that cannot be bypassed. This paper attempts to make a simple analysis of this problem and talk about some views.

Article from: Polaris power network

The Problem of "Impossible Triangle" of 1. Energy

In the field of financial policy, there is a popular "impossible triangle" theory, that is, a country in terms of financial policy can not achieve freedom of capital flow, monetary policy independence, exchange rate stability, in the three options can only achieve two, but not at the same time. Later, some people introduced this theory into the energy industry, believing that there is also an "impossible triangle" problem in the energy field that safety, environmental protection and economy cannot be realized at the same time.

1. The theory of "impossible triangle"

In 1997, Asian countries such as Thailand, Indonesia, and South Korea experienced financial crises one after another, which forced these countries to abandon their currency fixed exchange rate policies. In 1999, Professor Krugman of the Massachusetts Institute of Technology, based on the Mundell-Fleming model and the empirical analysis of the Asian financial crisis, put forward the theory of "impossible triangle", that is, it is impossible for a country to achieve free capital flow, independent monetary policy and stable exchange rate at the same time in terms of financial policy. If a country allows the free movement of capital and the independence of monetary policy, it will be difficult to maintain exchange rate stability; if it requires exchange rate stability and free movement of capital, it must give up monetary policy independence; if it wants to maintain exchange rate stability and monetary policy independence, it cannot achieve free movement of capital.

The "impossible triangle" theory is based on strict assumptions, namely, complete free movement of capital, complete monetary independence and complete exchange rate stability, without considering the intermediate situation. In fact, these three can be balanced and arranged between limited capital flows, limited monetary policy independence and limited exchange rate stability, depending on a country's political, economic, financial and many other factors.

The theory of "impossible triangle" has become a hot "cross-border theory" since it was put forward, and has been quoted and borrowed by other fields. For example, in the macro-economy, there is a saying that it is impossible to achieve growth, structural adjustment and inflation prevention at the same time; in the field of investment and financial management, it is difficult to find a financial product that meets the requirements of high yield, low risk and high liquidity at the same time; blockchain technology can not meet the three functions of security, decentralization and scalability at the same time, and so on.

2. There is an "impossible triangle" phenomenon in the energy sector

The coal-based energy resource endowment determines that China's traditional energy system is a high-emission system. Statistics show that nearly 90% of China's carbon emissions come from fossil energy. To achieve high-quality energy development, China's energy system must transition to clean and low-carbon. Safe and reliable, low-cost, green and low-carbon have become the most basic requirements for energy development from all walks of life.

However, on the one hand, there are higher expectations for energy development, and on the other hand, there are views that in the energy field, the three goals of security, economy, and environmental protection are difficult to achieve at the same time. This phenomenon is known as the energy "impossible triangle" (also known as the energy ternary paradox).

The specific explanation for the "impossible triangle" of energy is: to achieve a safe and stable supply of energy, it is necessary to have more abundant system reserve capacity, higher operation and maintenance level, stronger emergency force reserve, more advanced production technology and equipment, which will inevitably mean more cost increase, but at the same time exclude the investment in environmental protection system facilities; if we want to increase the investment in energy and environmental protection, it will not only reduce the economy of energy production, but also increase the complexity of production equipment and processes, and reduce the security of energy supply; and if you want to obtain the economy of energy supply, you have to reduce costs, which means energy security And cleanliness is not guaranteed.

From this point of view, there is indeed a relationship between energy security and stability, low prices, and clean and low carbon.

3. There is a difference between the "impossible triangle" in the energy sector and the financial sector.

Although on the surface, the "impossible triangle" in the financial policy field and the "impossible triangle" in the energy field do have some similarities, and they are not easy to have both, but we must be soberly aware that these two types of "impossible triangle" There is an essential difference.

First, the concept is different. The "impossible triangle" in the field of financial policy is a theory that has been confirmed by theory and practice, and the proponents of relevant theoretical achievements have even won the Nobel Prize in economics for this theory; while the so-called "impossible triangle" of energy is not yet a theory, let alone proved by practice, at most it can only be regarded as some views and opinions of the industry, which belongs to the concept of borrowing.

Second, the content is different. The "impossible triangle" in the field of financial policy refers to the fact that free capital flow, independent monetary policy and stable exchange rate cannot be combined, only one can be obtained, and one must be abandoned. According to some views, in the "impossible triangle" in the energy field, any two of security and stability, economic feasibility and clean and low carbon may be mutually exclusive, and preserving one will damage the other.

Finally, the coping strategies are different. The "impossible triangle" in the field of financial policy can be understood as a multiple-choice question. Different countries can choose the second one according to their own national conditions and policy orientation, and give up one (choose the opposite direction), that is to say, they have the right to choose, and It reflects the consistency of theory and practice; for the "impossible triangle" in the energy field, the industry has no choice, facing the three aspects that are mutually exclusive at the theoretical level, we should not give up every aspect, and we should do a good job, which reflects the inconsistency between theory and practice.

2. Dialectical View on the "Impossible Triangle" of Energy

Safety, economy and cleanliness are the three sides of energy, and they are the dialectical and unified relationship. In isolation, the three are incompatible with each other and cannot have both. If we make a comprehensive analysis, we will find that the three are based on each other, complement each other and promote each other.

1. The problem of energy "impossible triangle" under the "double carbon" target may exist for a long time.

Security and stability, economic feasibility, clean and low-carbon are the three directions that must be adhered to in energy development, which determines that the "impossible triangle" in the energy field will exist for a long time, which will accompany the whole process of economic development, energy transformation and implementation of the "double carbon" goal.

Although traditional fossil energy is easy to dispatch and control, and has the characteristics of safety and stability, it has high emissions, is not friendly to the environment, and is constrained by resources, which leads to unsustainable development. Therefore, it is necessary to transform to the clean production and utilization of fossil energy and to the development and utilization of clean energy. In the process of these transformations, it is necessary to consider the affordability of the environment and society as a whole, taking into account the safety, economy and cleanliness of energy.

Economic development needs more abundant energy security, and this higher security demand requires the extensive participation of larger scale and more types of energy, which is bound to put forward higher requirements for energy security, controllability, economic accessibility and clean and low-carbon nature, and further give birth to the so-called energy "impossible triangle" problem.

Under the "double carbon" goal, the "coal-based" fossil energy resource endowment determines that my country's energy industry must face more emission reduction and transformation responsibilities, and the entire industry needs to bear greater security pressure and economic pressure. After breaking, continue to expand the carbon neutral industry and gradually transform to a clean energy structure.

The "impossible triangle" in the energy field is the existence of contradictions that accompany the whole process of energy development. The more it is at the key node of development, the more prominent it is.

2. The relationship between the three is not completely opposite and separated, but supports and complements each other.

In a broad sense, energy security refers to the state in which a country (or region) has sovereignty or actual possession or availability of various strategic energy resources, the quantity and quality of which can guarantee the appropriate needs and sustainable development needs of the country (or region). Specifically, it includes the organic unity of energy supply security and energy use security; preventing large fluctuations in energy prices, sudden interruptions in energy supply, and the harm caused by energy pollution to economic development and the social environment; and the coordinated development of energy and the environment. It can be seen that the broad energy security itself covers three aspects of energy security, economy and environmental protection. The narrow concept of energy security refers only to the safe and stable operation and adequate supply of the energy system. In order to explain the convenience, this paper only takes the narrow concept of energy security.

Ensuring security and stability, low prices, clean and low-carbon is the unremitting pursuit of energy development by the whole society. The three are the unity of opposites, which embodies the three basic goals of energy development.

There are potential safety hazards, frequent safety accidents, and energy that damages the safety of people's lives and property is definitely uneconomical, and it is not environmentally friendly. It causes huge damage to the environment, which in turn affects people's lives and health and the normal development of society. The energy that requires continuous environmental restoration and environmental protection investment is not economic and security. Similarly, the high cost, high price, beyond the basic social capacity of energy, that is, can not be used energy, of course, there is no need to discuss its safety and environmental protection issues.

Looking at the whole process of energy development, the so-called "impossible" relationship among security, economy and environmental protection is always relative and controllable. The pursuit of progress of one of them should be based on the relative stability of the other two parties, rather than at the cost of the corresponding consumption of the other two parties. Regardless of the combination, it is the same.

Moreover, the progress and development of any of these three aspects will provide opportunities and basic conditions for the development and progress of other aspects. For example, if the problem of energy security and stability is solved, the industry will have more energy to study the cleanliness and economy of energy; if the problem of energy and environmental protection is solved, it will have more energy to expand the scale and improve efficiency to further solve the problem of safety and economy; once the economic problem is broken through, it can be freed up to tackle the problems of safety and environmental protection.

To sum up, the three development goals of security and stability, economic feasibility and environmental protection guide the whole process of energy development and progress. They are never opposite, but interdependent and complementary.

3. The history of new China's energy development proves that the energy "impossible triangle" problem has been solved.

Safety, economy and environmental protection are the real needs of the people for energy development. The three are unified in the higher requirements for energy development put forward by the growing material and cultural needs of the people.

Since the founding of New China, our energy industry has been developing in a safer, more environmentally friendly and more economical direction.

In the early days of the founding of New China, our energy productivity level was low, the relationship between supply and demand was tense, and there were serious structural problems. Since the founding of New China, my country's energy production and consumption levels have achieved leapfrog development, and now it is striding forward on the journey of accelerating the construction of an energy power.

Energy security supply capacity continues to increase. Since the founding of the people's Republic of China, China's energy production has gradually changed from weak to strong, and its productivity and production level have been greatly improved. It has become the largest country in energy production. It has basically formed an energy production system driven by coal, oil, gas and renewable energy, giving full play to its basic guarantee role. In 2021, the country's total primary energy production reached 4.33 billion tons of standard coal, an increase of more than 180 times over 1949.

Energy production is gradually changing to clean. In the early days of the founding of New China, the proportion of raw coal in China's total energy production was as high as 96.3 percent. In 2021, the country's total coal consumption will fall to 56.0 per cent of total energy consumption, and coal power generation will account for 60 per cent of total power generation. In 2021, the country's non-fossil energy power generation installed capacity exceeded coal power for the first time, with an installed capacity of 1.12 billion kilowatts, and the installed capacity of hydropower, wind power, and photovoltaics exceeded 0.3 billion kilowatts. In 2020, the emissions of thermal power smoke, sulfur dioxide and nitrogen oxides in China will be 0.032g/kwh, 0.160g/kwh and 0.179g/kwh respectively, which will continue to be in the leading international level.

The overall level of energy consumption has increased, and accessibility has increased accordingly. Since the founding of New China, China has also become the world's first energy consumer. In 2020, the national per capita energy consumption will increase by 80 times compared with 1949, and the per capita domestic electricity consumption will increase from less than 1 kW in 1949 to 781 kW.

From a historical perspective, you will find that my country's energy development has always taken into account safety, economy and environmental protection. With extraordinary wisdom and innovative spirit, we will continue to explore and achieve the best balance of the three to ensure coordinated and parallel development in the three directions.

3. Measures to Solve the Problem of Energy "Impossible Triangle"

Safe supply is the red line of energy development, green and low carbon is the bottom line of energy development, and low price is the goal of energy development. Seen statically and in isolation, these three goals seem difficult to achieve at the same time. If you look at it from a dynamic and developmental perspective, you will understand that with the comprehensive superposition of factors such as the increasing progress of science and technology, the continuous innovation of systems and mechanisms, and the substantial reduction of costs, the energy "impossible triangle" problem can be effectively solved.

1. Coordinate the relationship between the three according to different stages of development and policy objectives

Looking back at the history of world energy development, we find that the security, economic and environmental benefits of energy are not valued by the society at the same time, and there are different development focuses at different stages. Generally, we adopt the way of "concentrating our efforts and breaking them one by one" to crack the "impossible triangle" of energy respectively ".

In the early stage of energy utilization, the first thing to solve is the problem of energy security and economy, referring to China's fund-raising to run electricity in the 1980 s and 1990 s, and the rural power grid transformation with "two changes and one price" as the main content since the end of the 20th century. After that, with the continuous expansion of the scale of fossil energy utilization, pollutant emissions and carbon emissions continued to cause damage to the environment and even caused disasters locally. People gradually realized the importance of environmental protection and carbon reduction, and then began to solve the energy industry. Low-carbon environmental protection issues, such as my country's implementation of ultra-low emission transformation of coal-fired power plants during the "Twelfth Five-Year Plan" period and continues to this day. When facing downward pressure on the economy, people will pay more attention to the economy of energy. For example, in order to enhance the pressure-bearing capacity of enterprises, my country has reduced general industry and commerce for two consecutive years in 2018 and 2019.Electricity PriceOn the basis of 10%, it will be reduced by another 5% in 2020; and it will also reduce users' electricity costs by 180 billion yuan through market-oriented transactions from 2016 to 2018.

With the gradual formation and continuous improvement of the energy system, new energy sources with late-comer advantages must meet the safety access standards and environmental protection requirements before they can access the system, otherwise they will not be admitted and accessed. As for the economic issues of new energy, it is necessary to comprehensively consider social affordability, industrial support policies and technological progress.

In short, to solve the problems of energy security, economy and environmental protection is a process of continuous improvement by relying on scientific and technological progress and institutional innovation on the basis of maintaining the existing level.

2. Building a modern energy system to promote the "impossible triangle" relative balance

The eight words "clean, low-carbon, safe and efficient" are the core connotation of the modern energy system, and also cover all the energy "impossible triangle". Therefore, the construction of a modern energy system and a new type of power system with a gradual increase in the proportion of renewable energy is clearly the key to cracking the energy "impossible triangle. At this stage, the modern energy system is mainly built around three aspects: safety and stability, clean and low-carbon, and economic feasibility.

Enhance energy supply chain security and stability. Security is the primary task of energy development. Adhere to the principle of "based on the country, making up for shortcomings, diversified guarantees, and strengthening reserves", from multiple dimensions such as strategic safety, operational safety, and emergency safety, strengthen the construction of comprehensive energy security capabilities, and realize coal, oil, gas, and renewable energy. Multi-wheel drive. According to the "14th Five-Year Plan for Modern Energy System", by 2025, my country's comprehensive energy production capacity will reach more than 4.6 billion tons of standard coal, which can better meet economic and social development and the people's growing demand for a better life.

Promote green and low-carbon changes in energy supply. To ensure the cleanliness of energy supply, on the one hand, we should speed up the transformation of energy structure to green and low-carbon, and do a good job in "addition" to increase the supply capacity of clean energy; on the other hand, we should vigorously promote carbon emission reduction in the energy industry chain, do a good job in reducing carbon emissions in the energy industry chain, and promote the formation of a green and low-carbon energy supply model.

Improve the modernization level and economy of the energy industry chain. We will further give full play to the leading and strategic support role of scientific and technological innovation, enhance the ability of energy science and technology innovation, speed up the digitalization and intelligent upgrading of the energy industry, and greatly improve the efficiency of the energy system. We will comprehensively raise the basic upgrading of the energy industry and the modernization of the industrial chain, continuously reduce the cost of energy production, and promote the economic improvement of the energy industry.

Promote the development of energy electrification. The construction of a new power system is an important aspect of building a modern energy system, and it is also the key to cracking the so-called "impossible triangle" in the energy field. The development of multi-energy complementarity, the integration of source network, load and storage, and the breakthrough of new energy storage and hydrogen energy key technologies will help to realize the safety, reliability, clean, low-carbon and economic feasibility of energy at the same time.

3. Play the complementary role of active government and efficient market

Breaking the "impossible triangle" in the energy field and ensuring the safety, cleanliness and economy of energy cannot be achieved overnight. It requires a long-term development process. Only the "combination of two swords" of a promising government and an effective market can be effective.

Give full play to the guiding role of the government and strengthen the guarantee of policy coordination. Based on promoting the implementation of key tasks such as green and low-carbon energy development, security, and technological innovation, we will improve policy formulation and implementation mechanisms. We will implement relevant preferential tax policies, speed up the reform of the energy price formation mechanism, and increase support for renewable energy, energy conservation and carbon reduction, and innovative technology research and development and application. Strengthen the guidance of energy ecological environmental protection policies, and carry out environmental impact assessments such as energy base development and construction plans and key projects in accordance with the law. Establish a renewable energy consumption responsibility weight guidance mechanism, implement consumption responsibility assessment, study and formulate renewable energy consumption incremental incentive policies, promote green power certificate trading, and strengthen renewable energy consumption protection.

Efficient allocation of energy through marketization. Deepen the reform of the power system, promote the construction of a unified national power market system, innovate the power scheduling and trading mechanism conducive to the consumption of non-fossil energy power generation, and promote the orderly participation of non-fossil energy power generation in power market transactions. Guide and support energy storage facilities and demand-side resources to participate in power market transactions to promote system flexibility. Build an orderly competition, efficient supply of natural gas market system. Timely promote refined oil, natural gas and other futures trading. Accelerate the construction of a unified and open, hierarchical, functional, competitive and orderly modern coal market system.