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What Is the Impact of the Renewable Energy Power Absorption Guarantee Mechanism on China’s Green Electricity Market?

Author

Listed:
  • Yan Lu

    (State Grid Jibei Electric Power Company Limited Economic Research Institute, Beijing 100038, China)

  • Xuan Liu

    (State Grid Jibei Electric Power Company Limited Economic Research Institute, Beijing 100038, China)

  • Hongjian Li

    (State Grid Jibei Electric Power Company Limited Economic Research Institute, Beijing 100038, China)

  • Haoran Wang

    (School of Economy and Management, China University of Geosciences Beijing, Beijing 100083, China)

  • Jiajie Kong

    (School of Economy and Management, China University of Geosciences Beijing, Beijing 100083, China)

  • Cheng Zhong

    (School of Economy and Management, China University of Geosciences Beijing, Beijing 100083, China)

  • Mingli Cui

    (School of Economy and Management, China University of Geosciences Beijing, Beijing 100083, China)

  • Yan Li

    (School of Economy and Management, China University of Geosciences Beijing, Beijing 100083, China)

  • Xiaoqi Sun

    (School of Economy and Management, China University of Geosciences Beijing, Beijing 100083, China)

  • Jiadong Xuan

    (School of Economy and Management, China University of Geosciences Beijing, Beijing 100083, China)

  • Tiantian Feng

    (School of Economy and Management, China University of Geosciences Beijing, Beijing 100083, China)

Abstract

In order to accelerate the construction of a clean, low-carbon, safe and efficient energy system, China set the provincial weight of responsibility for renewable energy power consumption and established a renewable energy power absorption guarantee mechanism in 2019. As a market incentive policy, it has enduring effect on the low-carbon transformation of the power industry. Firstly, the operation mechanism of the renewable energy consumption guarantee mechanism is analyzed. The general framework, core elements and supporting measures are clarified. Secondly, a stock-flow diagram is constructed based on the system dynamics method. It contains the green electricity market sub-module, the green-certificate market sub-module and the excess power absorption market sub-module. Finally, multiple scenarios are set up to simulate the impact of the green-certificate market and excess power absorption market improvements on the installed capacity and tariff of China’s green power market. The renewable energy guarantee mechanism is an effective means to promote the consumption of green electricity in China. In addition, in the short term the cost of electricity for users has increased, but in the long term the cost of electricity shows a fluctuating downward trend. This study provides theoretical references for the formulation of clean and low-carbon policy objectives in the power industry and the optimization of market mechanisms.

Suggested Citation

  • Yan Lu & Xuan Liu & Hongjian Li & Haoran Wang & Jiajie Kong & Cheng Zhong & Mingli Cui & Yan Li & Xiaoqi Sun & Jiadong Xuan & Tiantian Feng, 2023. "What Is the Impact of the Renewable Energy Power Absorption Guarantee Mechanism on China’s Green Electricity Market?," Energies, MDPI, vol. 16(21), pages 1-20, November.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:21:p:7434-:d:1273791
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    References listed on IDEAS

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    4. Helgesen, Per Ivar & Tomasgard, Asgeir, 2018. "An equilibrium market power model for power markets and tradable green certificates, including Kirchhoff's Laws and Nash-Cournot competition," Energy Economics, Elsevier, vol. 70(C), pages 270-288.
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    Cited by:

    1. Xinfa Tang & Guozu Hao & Yonghua Wang & Youwei Wan & Jingjing Wang & Yan Luo & Musa Dirane Nubea, 2024. "Synergistic Development Pathways: An Exploratory Study on the Urban–Rural Mutual Assistance Model and Low-Carbon Transformation of Henan’s Power Supply Industry Towards Dual-Carbon Goals," Energies, MDPI, vol. 17(24), pages 1-19, December.
    2. Yan Lu & Bo Ning & Pengyun Geng & Yan Li & Jiajie Kong, 2025. "Research on the Current Status and Key Issues of China’s Green Electricity Trading Development," Energies, MDPI, vol. 18(7), pages 1-21, March.

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