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What will happen to the power supply structure and CO2 emissions reduction when TGC meets CET in the electricity market in China?

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  • Feng, Tian-tian
  • Yang, Yi-sheng
  • Yang, Yu-heng

Abstract

In order to fulfill the goals of sustainable development and emission reduction, as the main contributor to emissions, optimizing the electric structure is imperative for Chinese electric power industry. In the "thirteenth five-year" period, China has implemented tradable green certificates (TGC) and carbon emissions trading (CET) in the electricity market to accelerate the development of renewable energy. In this study, we analyze and simulate the dual effects of TGC and CET on the electricity market based on the theories and models of equilibrium and system dynamics. The obtained results show that: (1) The increase of renewable portfolio standards and carbon price is advantageous to the expansion of green electricity. The higher the portfolio standard and the carbon price are, the better the electric structure optimization could be. (2) The proportion of renewable energy power generation is expected to achieve the goal of ‘renewable energy thirteenth five-year development planning’ by 2020 (Goal: 680 million kW, 1.9 trillion kW h, 27% of all electricity generated). (3) The CO2 emission in the electric power industry will be controlled, meanwhile effectively promoting the realization of national CO2 emission-reduction target by 2020 (Target: below 1.6298 ton CO2 emission/10,000 yuan). (4) TGC system and CET system are incentive compatible in China. Finally, we propose some policy recommendations on the mechanism design and implementation for these two systems.

Suggested Citation

  • Feng, Tian-tian & Yang, Yi-sheng & Yang, Yu-heng, 2018. "What will happen to the power supply structure and CO2 emissions reduction when TGC meets CET in the electricity market in China?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 92(C), pages 121-132.
    • Handle: RePEc:eee:rensus:v:92:y:2018:i:c:p:121-132
    DOI: 10.1016/j.rser.2018.04.079
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    Cited by:

    1. Lei, Xu & Xin-gang, Zhao, 2023. "The synergistic effect between Renewable Portfolio Standards and carbon emission trading system: A perspective of China," Renewable Energy, Elsevier, vol. 211(C), pages 1010-1023.
    2. Zeng, Lijun & Wang, Jiafeng & Zhao, Laijun, 2022. "An inter-provincial tradable green certificate futures trading model under renewable portfolio standard policy," Energy, Elsevier, vol. 257(C).
    3. Hu, Yu & Chi, Yuanying & Zhou, Wenbing & Li, Jialin & Wang, Zhengzao & Yuan, Yongke, 2023. "The interactions between renewable portfolio standards and carbon emission trading in China: An evolutionary game theory perspective," Energy, Elsevier, vol. 271(C).
    4. Song, Xiaohua & Wang, Peng, 2023. "Effectiveness of carbon emissions trading and renewable energy portfolio standards in the Chinese provincial and coupled electricity markets," Utilities Policy, Elsevier, vol. 84(C).
    5. Jiang, Jingjing & Ye, Bin & Liu, Junguo, 2019. "Peak of CO2 emissions in various sectors and provinces of China: Recent progress and avenues for further research," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 813-833.
    6. Fang, Debin & Zhao, Chaoyang & Kleit, Andrew N., 2019. "The impact of the under enforcement of RPS in China: An evolutionary approach," Energy Policy, Elsevier, vol. 135(C).
    7. Ying, Zhou & Xin-gang, Zhao, 2021. "The impact of Renewable Portfolio Standards on carbon emission trading under the background of China’s electricity marketization reform," Energy, Elsevier, vol. 226(C).
    8. Xu, Xiaomin & Niu, Dongxiao & Xiao, Bowen & Guo, Xiaodan & Zhang, Lihui & Wang, Keke, 2020. "Policy analysis for grid parity of wind power generation in China," Energy Policy, Elsevier, vol. 138(C).
    9. Wang, Delu & Li, Chunxiao & Mao, Jinqi & Yang, Qing, 2023. "What affects the implementation of the renewable portfolio standard? An analysis of the four-party evolutionary game," Renewable Energy, Elsevier, vol. 204(C), pages 250-261.
    10. Yu, Xianyu & Ge, Shengxian & Zhou, Dequn & Wang, Qunwei & Chang, Ching-Ter & Sang, Xiuzhi, 2022. "Whether feed-in tariff can be effectively replaced or not? An integrated analysis of renewable portfolio standards and green certificate trading," Energy, Elsevier, vol. 245(C).
    11. Chi, Yuan-ying & Zhao, Hao & Hu, Yu & Yuan, Yong-ke & Pang, Yue-xia, 2022. "The impact of allocation methods on carbon emission trading under electricity marketization reform in China: A system dynamics analysis," Energy, Elsevier, vol. 259(C).
    12. Tang, Ling & Wang, Haohan & Li, Ling & Yang, Kaitong & Mi, Zhifu, 2020. "Quantitative models in emission trading system research: A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    13. Dong, Zhuojia & Yu, Xianyu & Chang, Ching-Ter & Zhou, Dequn & Sang, Xiuzhi, 2022. "How does feed-in tariff and renewable portfolio standard evolve synergistically? An integrated approach of tripartite evolutionary game and system dynamics," Renewable Energy, Elsevier, vol. 186(C), pages 864-877.
    14. Wu, Jiaqian & Chen, Yu & Yu, Lean & Li, Guohao & Li, Jingjing, 2023. "Has the evolution of renewable energy policies facilitated the construction of a new power system for China? A system dynamics analysis," Energy Policy, Elsevier, vol. 183(C).
    15. Song, Xiao-hua & Han, Jing-jing & Zhang, Lu & Zhao, Cai-ping & Wang, Peng & Liu, Xiao-yan & Li, Qiao-chu, 2021. "Impacts of renewable portfolio standards on multi-market coupling trading of renewable energy in China: A scenario-based system dynamics model," Energy Policy, Elsevier, vol. 159(C).
    16. Zha, Donglan & Jiang, Pansong & Zhang, Chaoqun & Xia, Dan & Cao, Yang, 2023. "Positive synergy or negative synergy: An assessment of the carbon emission reduction effect of renewable energy policy mixes on China's power sector," Energy Policy, Elsevier, vol. 183(C).
    17. Yang, Shubo & Jahanger, Atif & Hossain, Mohammad Razib, 2023. "Does China's low-carbon city pilot intervention limit electricity consumption? An analysis of industrial energy efficiency using time-varying DID model," Energy Economics, Elsevier, vol. 121(C).
    18. Zhang, Xinyue & Guo, Xiaopeng & Zhang, Xingping, 2023. "Assessing the policy synergy among power, carbon emissions trading and tradable green certificate market mechanisms on strategic GENCOs in China," Energy, Elsevier, vol. 278(PB).
    19. Annegret Henninger & Atefeh Mashatan, 2022. "Distributed Renewable Energy Management: A Gap Analysis and Proposed Blockchain-Based Architecture," JRFM, MDPI, vol. 15(5), pages 1-25, April.
    20. Hu, Yu & Chi, Yuanying & Zhao, Hao & Zhou, Wenbing, 2022. "The development of renewable energy industry under renewable portfolio standards: From the perspective of provincial resource differences," Energy Policy, Elsevier, vol. 170(C).

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