IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v186y2022icp864-877.html
   My bibliography  Save this article

How does feed-in tariff and renewable portfolio standard evolve synergistically? An integrated approach of tripartite evolutionary game and system dynamics

Author

Listed:
  • Dong, Zhuojia
  • Yu, Xianyu
  • Chang, Ching-Ter
  • Zhou, Dequn
  • Sang, Xiuzhi

Abstract

In order to promote the healthy development of renewable energy, China has implemented Feed-in Tariff (FIT) and Renewable Portfolio Standard (RPS). However, due to the differences in natural conditions, social economy and renewable energy development, how does FIT and RPS evolve to achieve the best policy synergy is still a controversial issue. To explore the cooperation and evolution between FIT and RPS, we establish a tripartite evolutionary game model based on regulatory agencies, renewable energy companies and power grid companies to explore the evolution of FIT and RPS, and then combine a game model and a system dynamics model to simulate and analyze the policy effects of FIT and RPS. The findings of the study are: (1) Considering three aspects of the environment, economic benefits, and the consumption of renewable energy, RPS will replace FIT as the main RE policy if the introduction of tradable green certificate market is carried out in an orderly manner. (2) The faster the rate of decline of FIT subsidies and the rate of increase of RPS quotas, the faster the power market will reach stability. (3) It is essential to formulate a reasonable incentive and penalty mechanism in the regulation of the RPS system.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:renene:v:186:y:2022:i:c:p:864-877
    DOI: 10.1016/j.renene.2022.01.030
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148122000301
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2022.01.030?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Pineda, Salvador & Bock, Andreas, 2016. "Renewable-based generation expansion under a green certificate market," Renewable Energy, Elsevier, vol. 91(C), pages 53-63.
    2. Bersalli, Germán & Menanteau, Philippe & El-Methni, Jonathan, 2020. "Renewable energy policy effectiveness: A panel data analysis across Europe and Latin America," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    3. Contaldi, Mario & Gracceva, Francesco & Tosato, Giancarlo, 2007. "Evaluation of green-certificates policies using the MARKAL-MACRO-Italy model," Energy Policy, Elsevier, vol. 35(2), pages 797-808, February.
    4. Wang, Hongye & Su, Bin & Mu, Hailin & Li, Nan & Gui, Shusen & Duan, Ye & Jiang, Bo & Kong, Xue, 2020. "Optimal way to achieve renewable portfolio standard policy goals from the electricity generation, transmission, and trading perspectives in southern China," Energy Policy, Elsevier, vol. 139(C).
    5. Shahmohammadi, M. Sadegh & Mohd. Yusuff, Rosnah & Keyhanian, Sina & Shakouri G., Hamed, 2015. "A decision support system for evaluating effects of Feed-in Tariff mechanism: Dynamic modeling of Malaysia’s electricity generation mix," Applied Energy, Elsevier, vol. 146(C), pages 217-229.
    6. Ringel, Marc, 2006. "Fostering the use of renewable energies in the European Union: the race between feed-in tariffs and green certificates," Renewable Energy, Elsevier, vol. 31(1), pages 1-17.
    7. Wang, Bing & Wei, Yi-Ming & Yuan, Xiao-Chen, 2018. "Possible design with equity and responsibility in China’s renewable portfolio standards," Applied Energy, Elsevier, vol. 232(C), pages 685-694.
    8. Bergek, Anna & Jacobsson, Staffan, 2010. "Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003-2008," Energy Policy, Elsevier, vol. 38(3), pages 1255-1271, March.
    9. Zhu, Chaoping & Fan, Ruguo & Lin, Jinchai, 2020. "The impact of renewable portfolio standard on retail electricity market: A system dynamics model of tripartite evolutionary game," Energy Policy, Elsevier, vol. 136(C).
    10. Zhou, Shan & Solomon, Barry D., 2020. "Do renewable portfolio standards in the United States stunt renewable electricity development beyond mandatory targets?," Energy Policy, Elsevier, vol. 140(C).
    11. 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.
    12. Yu-zhuo, Zhang & Xin-gang, Zhao & Ling-zhi, Ren & Ji, Liang & Ping-kuo, Liu, 2017. "The development of China's biomass power industry under feed-in tariff and renewable portfolio standard: A system dynamics analysis," Energy, Elsevier, vol. 139(C), pages 947-961.
    13. Geoff Martin & Eri Saikawa, 2017. "Effectiveness of state climate and energy policies in reducing power-sector CO2 emissions," Nature Climate Change, Nature, vol. 7(12), pages 912-919, December.
    14. Ndiritu, S. Wagura & Engola, Monica Katungi, 2020. "The effectiveness of feed-in-tariff policy in promoting power generation from renewable energy in Kenya," Renewable Energy, Elsevier, vol. 161(C), pages 593-605.
    15. Baur, Lucia & Uriona M., Mauricio, 2018. "Diffusion of photovoltaic technology in Germany: A sustainable success or an illusion driven by guaranteed feed-in tariffs?," Energy, Elsevier, vol. 150(C), pages 289-298.
    16. Xi Lu & Michael B. McElroy & Wei Peng & Shiyang Liu & Chris P. Nielsen & Haikun Wang, 2016. "Challenges faced by China compared with the US in developing wind power," Nature Energy, Nature, vol. 1(6), pages 1-6, June.
    17. Friedman, Daniel, 1991. "Evolutionary Games in Economics," Econometrica, Econometric Society, vol. 59(3), pages 637-666, May.
    18. Böhringer, Christoph & Cuntz, Alexander & Harhoff, Dietmar & Asane-Otoo, Emmanuel, 2017. "The impact of the German feed-in tariff scheme on innovation: Evidence based on patent filings in renewable energy technologies," Energy Economics, Elsevier, vol. 67(C), pages 545-553.
    19. Jonathan J. Buonocore & Ernani Choma & Aleyda H. Villavicencio & John D. Spengler & Dinah A. Koehler & John S. Evans & Jos Lelieveld & Piet Klop & Ramon Sanchez-Pina, 2019. "Correction: Metrics for the sustainable development goals: renewable energy and transportation," Palgrave Communications, Palgrave Macmillan, vol. 5(1), pages 1-2, December.
    20. Castaneda, Monica & Zapata, Sebastian & Cherni, Judith & Aristizabal, Andres J. & Dyner, Isaac, 2020. "The long-term effects of cautious feed-in tariff reductions on photovoltaic generation in the UK residential sector," Renewable Energy, Elsevier, vol. 155(C), pages 1432-1443.
    21. Benjamin K. Sovacool & Patrick Schmid & Andy Stirling & Goetz Walter & Gordon MacKerron, 2020. "Differences in carbon emissions reduction between countries pursuing renewable electricity versus nuclear power," Nature Energy, Nature, vol. 5(11), pages 928-935, November.
    22. Zahedi, A., 2010. "A review on feed-in tariff in Australia, what it is now and what it should be," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 3252-3255, December.
    23. Lesser, Jonathan A. & Su, Xuejuan, 2008. "Design of an economically efficient feed-in tariff structure for renewable energy development," Energy Policy, Elsevier, vol. 36(3), pages 981-990, March.
    24. Fan, Jing-Li & Wang, Jia-Xing & Hu, Jia-Wei & Wang, Yu & Zhang, Xian, 2019. "Optimization of China’s provincial renewable energy installation plan for the 13th five-year plan based on renewable portfolio standards," Applied Energy, Elsevier, vol. 254(C).
    25. Hao, Peng & Guo, Jun-Peng & Chen, Yihsu & Xie, Bai-Chen, 2020. "Does a combined strategy outperform independent policies? Impact of incentive policies on renewable power generation," Omega, Elsevier, vol. 97(C).
    26. Hulshof, Daan & Jepma, Catrinus & Mulder, Machiel, 2019. "Performance of markets for European renewable energy certificates," Energy Policy, Elsevier, vol. 128(C), pages 697-710.
    27. Verbruggen, Aviel & Lauber, Volkmar, 2012. "Assessing the performance of renewable electricity support instruments," Energy Policy, Elsevier, vol. 45(C), pages 635-644.
    28. Dong, Yanli & Shimada, Koji, 2017. "Evolution from the renewable portfolio standards to feed-in tariff for the deployment of renewable energy in Japan," Renewable Energy, Elsevier, vol. 107(C), pages 590-596.
    29. Barbosa, Luciana & Nunes, Cláudia & Rodrigues, Artur & Sardinha, Alberto, 2020. "Feed-in tariff contract schemes and regulatory uncertainty," European Journal of Operational Research, Elsevier, vol. 287(1), pages 331-347.
    30. Jonathan J. Buonocore & Ernani Choma & Aleyda H. Villavicencio & John D. Spengler & Dinah A. Koehler & John S. Evans & Jos Lelieveld & Piet Klop & Ramon Sanchez-Pina, 2019. "Metrics for the sustainable development goals: renewable energy and transportation," Palgrave Communications, Palgrave Macmillan, vol. 5(1), pages 1-14, December.
    31. Zhang, Qi & Wang, Ge & Li, Yan & Li, Hailong & McLellan, Benjamin & Chen, Siyuan, 2018. "Substitution effect of renewable portfolio standards and renewable energy certificate trading for feed-in tariff," Applied Energy, Elsevier, vol. 227(C), pages 426-435.
    32. Liu, Xiaohong & Zhao, Tong & Chang, Ching-Ter & Fu, Changjui James, 2021. "China’s renewable energy strategy and industrial adjustment policy," Renewable Energy, Elsevier, vol. 170(C), pages 1382-1395.
    33. Du, Yimeng & Takeuchi, Kenji, 2020. "Does a small difference make a difference? Impact of feed-in tariff on renewable power generation in China," Energy Economics, Elsevier, vol. 87(C).
    34. Jan-Philipp Sasse & Evelina Trutnevyte, 2020. "Regional impacts of electricity system transition in Central Europe until 2035," Nature Communications, Nature, vol. 11(1), pages 1-14, December.
    35. Sanya Carley & Lincoln L. Davies & David B. Spence & Nikolaos Zirogiannis, 2018. "Empirical evaluation of the stringency and design of renewable portfolio standards," Nature Energy, Nature, vol. 3(9), pages 754-763, September.
    36. 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).
    37. Ding, Hao & Zhou, Dequn & Zhou, P., 2020. "Optimal policy supports for renewable energy technology development: A dynamic programming model," Energy Economics, Elsevier, vol. 92(C).
    38. Pyrgou, Andri & Kylili, Angeliki & Fokaides, Paris A., 2016. "The future of the Feed-in Tariff (FiT) scheme in Europe: The case of photovoltaics," Energy Policy, Elsevier, vol. 95(C), pages 94-102.
    39. Fais, Birgit & Blesl, Markus & Fahl, Ulrich & Voß, Alfred, 2014. "Comparing different support schemes for renewable electricity in the scope of an energy systems analysis," Applied Energy, Elsevier, vol. 131(C), pages 479-489.
    40. Leah C. Stokes & Christopher Warshaw, 2017. "Renewable energy policy design and framing influence public support in the United States," Nature Energy, Nature, vol. 2(8), pages 1-6, August.
    41. Boomsma, Trine Krogh & Meade, Nigel & Fleten, Stein-Erik, 2012. "Renewable energy investments under different support schemes: A real options approach," European Journal of Operational Research, Elsevier, vol. 220(1), pages 225-237.
    42. Dong, Changgui & Zhou, Runmin & Li, Jiaying, 2021. "Rushing for subsidies: The impact of feed-in tariffs on solar photovoltaic capacity development in China," Applied Energy, Elsevier, vol. 281(C).
    43. Trypolska, Galyna, 2012. "Feed-in tariff in Ukraine: The only driver of renewables' industry growth?," Energy Policy, Elsevier, vol. 45(C), pages 645-653.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guoxian Cao & Chaoyang Guo & Hezhong Li, 2022. "Risk Analysis of Public–Private Partnership Waste-to-Energy Incineration Projects from the Perspective of Rural Revitalization," Sustainability, MDPI, vol. 14(13), pages 1-19, July.
    2. Fuquan Zhao & Fanlong Bai & Xinglong Liu & Zongwei Liu, 2022. "A Review on Renewable Energy Transition under China’s Carbon Neutrality Target," Sustainability, MDPI, vol. 14(22), pages 1-27, November.
    3. Ying, Zhou & Xin-gang, Zhao & Lei, Xu, 2022. "Supply side incentive under the Renewable Portfolio Standards: A perspective of China," Renewable Energy, Elsevier, vol. 193(C), pages 505-518.
    4. Qiongzhi Liu & Jingjing Sun, 2023. "Tripartite Evolutionary Game of Power Generation Enterprises’ Green Transformation under the Responsibility Assessment of Renewable Energy Consumption in China," Sustainability, MDPI, vol. 15(13), pages 1-26, July.
    5. Teng, Minmin & Lv, Kunfeng & Han, Chuanfeng & Liu, Pihui, 2023. "Trading behavior strategy of power plants and the grid under renewable portfolio standards in China: A tripartite evolutionary game analysis," Energy, Elsevier, vol. 284(C).
    6. Li, Xiaozhu & Chen, Laijun & Sun, Fan & Hao, Yibo & Du, Xili & Mei, Shenwei, 2023. "Share or not share, the analysis of energy storage interaction of multiple renewable energy stations based on the evolution game," Renewable Energy, Elsevier, vol. 208(C), pages 679-692.
    7. 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.
    8. Kërçi, Taulant & Tzounas, Georgios & Milano, Federico, 2022. "A dynamic behavioral model of the long-term development of solar photovoltaic generation driven by feed-in tariffs," Energy, Elsevier, vol. 256(C).
    9. 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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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).
    2. 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).
    3. 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).
    4. 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).
    5. Xu, Jie & Lv, Tao & Hou, Xiaoran & Deng, Xu & Liu, Feng, 2021. "Provincial allocation of renewable portfolio standard in China based on efficiency and fairness principles," Renewable Energy, Elsevier, vol. 179(C), pages 1233-1245.
    6. Ying, Zhou & Xin-gang, Zhao & Xue-feng, Jia & Zhen, Wang, 2021. "Can the Renewable Portfolio Standards improve social welfare in China's electricity market？," Energy Policy, Elsevier, vol. 152(C).
    7. Ying, Zhou & Xin-gang, Zhao & Zhen, Wang, 2020. "Demand side incentive under renewable portfolio standards: A system dynamics analysis," Energy Policy, Elsevier, vol. 144(C).
    8. Xu, Jiuping & Yang, Guocan & Wang, Fengjuan & Shu, Kejing, 2022. "A provincial renewable portfolio standards-based distribution strategy for both power plant and user: A case study from Guangdong, China," Energy Policy, Elsevier, vol. 165(C).
    9. Setiawan, Andri D. & Dewi, Marmelia P. & Jafino, Bramka Arga & Hidayatno, Akhmad, 2022. "Evaluating feed-in tariff policies on enhancing geothermal development in Indonesia," Energy Policy, Elsevier, vol. 168(C).
    10. Libo Zhang & Qian Du & Dequn Zhou, 2021. "Grid Parity Analysis of China’s Centralized Photovoltaic Generation under Multiple Uncertainties," Energies, MDPI, vol. 14(7), pages 1-19, March.
    11. Parrish Bergquist & Christopher Warshaw, 2023. "How climate policy commitments influence energy systems and the economies of US states," Nature Communications, Nature, vol. 14(1), pages 1-9, December.
    12. Darmani, Anna & Rickne, Annika & Hidalgo, Antonio & Arvidsson, Niklas, 2016. "When outcomes are the reflection of the analysis criteria: A review of the tradable green certificate assessments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 372-381.
    13. Hu, Xing & Yu, Shiwei & Fang, Xu & Ovaere, Marten, 2023. "Which combinations of renewable energy policies work better? Insights from policy text synergies in China," Energy Economics, Elsevier, vol. 127(PA).
    14. 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.
    15. Guoxian Cao & Chaoyang Guo & Hezhong Li, 2022. "Risk Analysis of Public–Private Partnership Waste-to-Energy Incineration Projects from the Perspective of Rural Revitalization," Sustainability, MDPI, vol. 14(13), pages 1-19, July.
    16. Teng, Minmin & Lv, Kunfeng & Han, Chuanfeng & Liu, Pihui, 2023. "Trading behavior strategy of power plants and the grid under renewable portfolio standards in China: A tripartite evolutionary game analysis," Energy, Elsevier, vol. 284(C).
    17. Fan, Jing-Li & Wang, Jia-Xing & Hu, Jia-Wei & Yang, Yang & Wang, Yu, 2021. "Will China achieve its renewable portfolio standard targets? An analysis from the perspective of supply and demand," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    18. 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).
    19. Darmani, Anna, 2015. "Renewable energy investors in Sweden: A cross-subsector analysis of dynamic capabilities," Utilities Policy, Elsevier, vol. 37(C), pages 46-57.
    20. Li, Hong Xian & Zhang, Yitao & Li, Yan & Huang, Jiaxin & Costin, Glenn & Zhang, Peng, 2021. "Exploring payback-year based feed-in tariff mechanisms in Australia," Energy Policy, Elsevier, vol. 150(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:186:y:2022:i:c:p:864-877. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.