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Scenario Analysis in the Electric Power Industry under the Implementation of the Electricity Market Reform and a Carbon Policy in China

Author

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  • Peng Wang

    (Electrical and Electronic Engineering School, North China Electric Power University, Beijing 102206, China)

  • Meng Li

    (Electrical and Electronic Engineering School, North China Electric Power University, Beijing 102206, China)

Abstract

In China, electricity market reform was first implemented in 2015. At the same time, the national carbon market was built, along with the electricity industry, which was considered a breakthrough. Some key considerations for the future development of China’s electricity system include the implementation of demand-side measures in order to adjust the peak-to-valley difference and the economic dispatch of increasing intermittent renewable energy and traditional energy in the process of power marketization with the implementation of a carbon policy. This paper examines the impact of policies on electricity generation by modelling the evolution process of power marketization and the economic dispatch of generation technologies over a sixteen-year period beginning in 2020. We model four potential influencing factors of government policy: (1) the demand response mode; (2) power marketization process; (3) capacity adjustment of thermal power units; and (4) carbon taxes, which vary in terms of their timing and amount. This model assesses the impact of these influencing factors on the competition between electricity generators using a range of output variables, including generation portfolios, electricity prices, capacity factors, CO 2 emissions, etc. The results show that the new round of electricity market reforms has had a positive impact on renewable energy generation. The influence of carbon policy is evident in the promotion, transformation and elimination of thermal units, and an indirect increase in renewable energy generation.

Suggested Citation

  • Peng Wang & Meng Li, 2019. "Scenario Analysis in the Electric Power Industry under the Implementation of the Electricity Market Reform and a Carbon Policy in China," Energies, MDPI, vol. 12(11), pages 1-26, June.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:11:p:2152-:d:237382
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    References listed on IDEAS

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    3. Li, Yan & Feng, Tian-tian & Liu, Li-li & Zhang, Meng-xi, 2023. "How do the electricity market and carbon market interact and achieve integrated development?--A bibliometric-based review," Energy, Elsevier, vol. 265(C).
    4. Alok K. Tripathi, 2021. "Crisis of Survival of Thermal Power Plants in India due to Consistently Falling Capacity Utilization Factors Responsible and Future Outlook," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 328-337.
    5. Zheng, Xuemei & Menezes, Flavio & Nepal, Rabindra, 2021. "In between the state and the market: An empirical assessment of the early achievements of China's 2015 electricity reform," Energy Economics, Elsevier, vol. 93(C).
    6. Zhang, Xiaodong & Patino-Echeverri, Dalia & Li, Mingquan & Wu, Libo, 2022. "A review of publicly available data sources for models to study renewables integration in China's power system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    7. Guoliang Zhang & Suhua Lou & Yaowu Wu & Yang Wu & Xiangfeng Wen, 2020. "A New Commerce Operation Model for Integrated Energy System Containing the Utilization of Bio-Natural Gas," Energies, MDPI, vol. 13(24), pages 1-13, December.

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