This paper attempts to present a complete picture of the status quo and future trends of the development of rural household energy in China based on a literature review and a systems analysis. First, a comprehensive literature review was conducted from the perspectives of energy consumption, carbon emissions and pollutants, energy resources, energy technologies, and energy policies. The review revealed the complexities and dynamics of the current system of rural household energy in China, and several key issues were identified for further attention. These issues are further explored by a systems analysis based on the “Integrated strategy of Sustainable development objectives, Decision-making systems, Operation systems, and Physical systems” (I-SDOP) concept. Following this method, a complete picture of the market status and policy targets is presented, by mapping an energy Sankey diagram and by reviewing the behavior of the main players. The results indicate that synergy of various energies, technologies, and players, and a combination of flexible engineering schemes and policy designs, with adequate consideration of temporal variation and regional disparity, are key strategies to promote the sustainable development of rural household energy, especially the distributed utilization of renewable energy, in China.

The development of district heating systems of corn straw densified fuel (CSDF-DHS) is an important option to promote the use of bioenergy on a large scale for sustainable development, especially in China. At present, China’s biomass densified solid fuel (BSDF) development lags behind previously planned target, main barriers of which are economic and policy support problems. Accurate case studies are key to analyze these problems. This manuscript takes Nong’an County in Jilin Province of China as an example to establish a techno-economic model to evaluate the economic performance of a CSDF-DHS under two policy scenarios. It calculates the economic performance under a benchmark market scenario (BMS) and the current policy scenario (CPS) and analyzes the influence of various policy instruments, including subsidies, carbon trading, and preferential taxation. The results indicate that: (1) The CSDF-DHS option is not competitive under the BMS or CPS compared to the traditional energy system based mainly on coal and liquefied petroleum gas; (2) Comparatively, the economic performance of corn straw briquette fuel (CSBF) is better than that of corn straw pellet fuel (CSPF); and (3) further policy support can make CSDF-DHSs competitive in the market, especially with subsidies for concentrated heating services and CSDF, carbon trading, and economic compensation to reduce the profit margin of enterprises, which can make both CSPF-DHSs and CSBF-DHSs competitive. The research results could provide scientific basis for relevant policy making and project decision.