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Study on the promotion of natural gas-fired electricity with energy market reform in China using a dynamic game-theoretic model

Author

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  • Tian, Ruijie
  • Zhang, Qi
  • Wang, Ge
  • Li, Hailong
  • Chen, Siyuan
  • Li, Yan
  • Tian, Yulu

Abstract

Natural gas-fired electricity (NGFE) has gained great attention in China recently. However, the high generation cost leads to the NGFE cannot compete economically with the coal-fired electricity (CFE) when the value of peak power and positive environment externality of NGEF are not considered. Therefore, the market reform of natural gas (NG), including price deregulation, carbon tax and environmental subsidy are of vital importance to promote the penetration of NGFE. In the present study, a dynamic game-theoretic model was developed to analyze the impacts of market reforming for natural gas on the promotion effect of NGFE, in which the hourly real-time pricing (RTP) was applied in both natural gas and electricity markets. Five scenarios were proposed with different policy combinations of pricing mechanism reform, carbon tax and environmental subsidy. Based on the analysis results, it can be concluded that (i) deregulating the NG price, imposing carbon tax and adopting environment subsidy can promote the market penetration of NGFE greatly; and (ii) the market deregulation can increases the share of NGFE to 5.49%, and imposing the carbon tax of 100RMB/tonne CO2 can raise it further to 7.66%, furthermore if the environmental subsidy of 134.3 RMB/MWh is also included, the share of NGFE can reach 15%.

Suggested Citation

  • Tian, Ruijie & Zhang, Qi & Wang, Ge & Li, Hailong & Chen, Siyuan & Li, Yan & Tian, Yulu, 2017. "Study on the promotion of natural gas-fired electricity with energy market reform in China using a dynamic game-theoretic model," Applied Energy, Elsevier, vol. 185(P2), pages 1832-1839.
    • Handle: RePEc:eee:appene:v:185:y:2017:i:p2:p:1832-1839
    DOI: 10.1016/j.apenergy.2015.11.079
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    References listed on IDEAS

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    Cited by:

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    2. Demetriou, E. & Hadjistassou, C., 2021. "Can China decarbonize its electricity sector?," Energy Policy, Elsevier, vol. 148(PB).
    3. Yamchi, Hamid Bakhshi & Safari, Amin & Guerrero, Josep M., 2021. "A multi-objective mixed integer linear programming model for integrated electricity-gas network expansion planning considering the impact of photovoltaic generation," Energy, Elsevier, vol. 222(C).
    4. Zhu, Lijing & Wang, Peize & Zhang, Qi, 2019. "Indirect network effects in China’s electric vehicle diffusion under phasing out subsidies," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
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    6. Lin Wang & Yuping Xing, 2022. "Risk Assessment of a Coupled Natural Gas and Electricity Market Considering Dual Interactions: A System Dynamics Model," Energies, MDPI, vol. 16(1), pages 1-18, December.
    7. Rioux, Bertrand & Galkin, Philipp & Murphy, Frederic & Feijoo, Felipe & Pierru, Axel & Malov, Artem & Li, Yan & Wu, Kang, 2019. "The economic impact of price controls on China's natural gas supply chain," Energy Economics, Elsevier, vol. 80(C), pages 394-410.
    8. Juanwei, Chen & Tao, Yu & Yue, Xu & Xiaohua, Cheng & Bo, Yang & Baomin, Zhen, 2019. "Fast analytical method for reliability evaluation of electricity-gas integrated energy system considering dispatch strategies," Applied Energy, Elsevier, vol. 242(C), pages 260-272.
    9. Motalleb, Mahdi & Ghorbani, Reza, 2017. "Non-cooperative game-theoretic model of demand response aggregator competition for selling stored energy in storage devices," Applied Energy, Elsevier, vol. 202(C), pages 581-596.
    10. Guo, Hongye & Chen, Qixin & Xia, Qing & Kang, Chongqing, 2018. "Market equilibrium analysis with high penetration of renewables and gas-fired generation: An empirical case of the Beijing-Tianjin-Tangshan power system," Applied Energy, Elsevier, vol. 227(C), pages 384-392.
    11. Liu, HuiHui & Zhang, ZhongXiang & Chen, Zhan-Ming & Dou, DeSheng, 2019. "The impact of China's electricity price deregulation on coal and power industries: Two-stage game modeling," Energy Policy, Elsevier, vol. 134(C).

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