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Economic Decision-Making for Coal Power Flexibility Retrofitting and Compensation in China

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  • Chunning Na

    (School of Physics & Electronic-Electrical Engineering, Ningxia University, Yinchuan 750021, China)

  • Jiahai Yuan

    (School of Economics and Management, North China Electric Power University, Beijing 102206, China
    Beijing Key Laboratory of New Energy and Low-Carbon Development, North China Electric Power University, Changping, Beijing 102206, China)

  • Yuhong Zhu

    (School of Physics & Electronic-Electrical Engineering, Ningxia University, Yinchuan 750021, China)

  • Li Xue

    (School of Physics & Electronic-Electrical Engineering, Ningxia University, Yinchuan 750021, China)

Abstract

In China, in order to integrate more renewable energy into the power grid, coal power flexibility retrofitting is imperative. This paper elaborates a generic method for estimating the flexibility potential from the rapid ramp rate and peak shaving operation using nonlinear programming, and defines three flexibility elastic coefficients to quantify the retrofitted targets. The optimized range of the retrofitted targets determined by the flexibility elastic coefficients have a reference significance on coal power flexibility retrofitting. Then, in order to enable economic decisions for coal power flexibility retrofitting, we address a profit maximizing issue regarding optimization decisions for coal power flexibility retrofitting under an assumption of perfect competition, further analyzing the characteristic roots of marginal cost equal to marginal revenue. The rationality of current compensation standards for peak shaving in China can also be judged in the analysis. The case study results show that economic decision-making depends on the compensation standard and the peak shaving depth and time. At a certain peak shaving depth and time, with rational compensation standard power plants are willing to carry out coal power flexibility retrofitting. The current compensation standard in Northeast China is high enough to carry out coal power flexibility retrofitting. These research conclusions have theoretical significance for China’s peak shaving compensation standards formulation.

Suggested Citation

  • Chunning Na & Jiahai Yuan & Yuhong Zhu & Li Xue, 2018. "Economic Decision-Making for Coal Power Flexibility Retrofitting and Compensation in China," Sustainability, MDPI, Open Access Journal, vol. 10(2), pages 1-22, January.
  • Handle: RePEc:gam:jsusta:v:10:y:2018:i:2:p:348-:d:129275
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    References listed on IDEAS

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    1. Denholm, Paul & Hand, Maureen, 2011. "Grid flexibility and storage required to achieve very high penetration of variable renewable electricity," Energy Policy, Elsevier, vol. 39(3), pages 1817-1830, March.
    2. Huber, Matthias & Dimkova, Desislava & Hamacher, Thomas, 2014. "Integration of wind and solar power in Europe: Assessment of flexibility requirements," Energy, Elsevier, vol. 69(C), pages 236-246.
    3. Lund, Peter D. & Lindgren, Juuso & Mikkola, Jani & Salpakari, Jyri, 2015. "Review of energy system flexibility measures to enable high levels of variable renewable electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 785-807.
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    Cited by:

    1. Oksana Marinina & Marina Nevskaya & Izabela Jonek-Kowalska & Radosław Wolniak & Mikhail Marinin, 2021. "Recycling of Coal Fly Ash as an Example of an Efficient Circular Economy: A Stakeholder Approach," Energies, MDPI, Open Access Journal, vol. 14(12), pages 1-21, June.
    2. Haonan Zhang & Xingping Zhang & Jiahai Yuan, 2020. "Coal power in China: A multi‐level perspective review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 9(6), November.
    3. Jiaomin Liu & Tong Guo & Yue Wang & Yonggang Li & Shanshan Xu, 2020. "Multi-Technical Flexibility Retrofit Planning of Thermal Power Units Considering High Penetration Variable Renewable Energy: The Case of China," Sustainability, MDPI, Open Access Journal, vol. 12(9), pages 1-16, April.
    4. Xiaolong Yang & Dongxiao Niu & Meng Chen & Keke Wang & Qian Wang & Xiaomin Xu, 2020. "An Operation Benefit Analysis and Decision Model of Thermal Power Enterprises in China against the Background of Large-Scale New Energy Consumption," Sustainability, MDPI, Open Access Journal, vol. 12(11), pages 1-19, June.
    5. Chunning Na & Huan Pan & Yuhong Zhu & Jiahai Yuan & Lixia Ding & Jungang Yu, 2019. "The Flexible Operation of Coal Power and Its Renewable Integration Potential in China," Sustainability, MDPI, Open Access Journal, vol. 11(16), pages 1-17, August.

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