Will the tradable green certifications and renewable portfolio standard policy work well in China: A recursive CGE analysis

Abstract

Massive carbon emissions and environmental pollution from electric power industries make China accelerate the promotion of renewable energy power. Since then, Tradable Green Certifications (TGCs) and Renewable Portfolio Standard (RPS) systems have been adopted as a main energy policy to deepen the current power sector reform. A recursive computable general equilibrium model will be constructed to explore the impacts of TGC and RPS policies under 4 scenarios. The simulation results show that the implementation of TGC and RPS policies will reduce 1.12 Bt-CO2 emissions and 1040.31 Mtce energy consumptions at most in 2030. Moreover, the TGC and RPS policies will help to rebuild a sustainable economic structure by the limitation of fossil energy consumption and output; especially in coal and oil industries, the spread of TGC and RPS makes renewable energy electricity become fungible for other energy generation. Nevertheless, this policy will also cause a lot of economic loss in gross domestic product through the huge deterioration of fossil energy-related industries, which will be expressed in the dramatic decline of output, consumption, and import and export trade. Additionally, we discover that the RPS level will have a significant influence on TGC prices: the higher the RPS level, the more the expensive TGC price. Overall speaking, the RPS level of 30% would be a better choice for the balance between the development of renewable energy and the negative impact on macroeconomics. It is recommended that the implementation of the TGC and RPS level should be with other economic policies to reduce the negative effects.

Study on China’s Renewable Energy Policy Reform and Improved Design of Renewable Portfolio Standard

“…As of April 2018, the installed capacity of wind power, which over 6000 kW, reached 164.46 million kW, that is nearly 9.85% of the total energy consumption in the country. However, from January 2017 to April 2018, the monthly average ratio of wind power generation to total power generation was 5.28%, which means that nearly half of the wind power units were not functioning, and this phenomenon was found to be even more serious in some major wind power generation areas [33,34]. Table 1 shows the wind power generation in some provinces.…”

On the Way to Integrate Increasing Shares of Variable Renewables in China: Experience from Flexibility Modification and Deep Peak Regulation Ancillary Service Market Based on MILP-UC Programming

“…The randomness and the volatility of VRE power output are considered, and more recent state-of-the-art research concentrates on distributed robust optimization for real-time balanced scheduling considering future high VRE penetration [37][38][39]. Meanwhile, represented by policy evaluations for unique China cases based on dynamic computable general equilibrium model and evolutionary game theory combined with system dynamics, the internal economic logic for macro level and industry level and tradeoffs among different energy market subjects have been taken into more consideration [40,41].…”

On the Way to Integrate Increasing Shares of Variable Renewables in China: Activating Nearby Accommodation Potential under New Provincial Renewable Portfolio Standard

“…It is generally accepted that great changes will happen to China's power supply structure, carbon emissions reduction, electricity prices, renewable investment decisions, social welfare, and governmental expenditure on subsidies when RPS, together with TGC, is practically adopted [6,7]. Particularly, Chinese researchers pay more attention to the connection between RPS and existing energy policies, such as the substitution effect of RPS and TGC on feed-in tariff (FIT), and the inside cooperation among RPS policy, electricity market, and carbon trading [8][9][10]. The special effect towards cutting curtailment and promoting accommodation of VRE in China is also separately proved [11].…”