Economic and environmental benefits of market-based power-system reform in China: A case study of the Southern grid system
Date Published |
01/2020
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Publication Type | Journal Article
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Authors | |
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DOI |
10.1016/j.resconrec.2019.104558
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Abstract |
China, whose power system accounts for about 13% of global energy-related CO2 emissions, has begun implementing market-based power-sector reforms. This paper simulates power system dispatch in China’s Southern Grid region and examines the economic and environmental impacts of market-based operations. We find that market-based operation can increase efficiency and reduce costs in all Southern Grid provinces—reducing wholesale electricity costs by up to 35% for the entire region relative to the 2016 baseline. About 60% of the potential cost reduction can be realized by creating independent provincial markets within the region, and the rest by creating a regional market without transmission expansion. The wholesale market revenue is adequate to recover generator fixed costs; however, financial restructuring of current payment mechanisms may be necessary. Electricity markets could also reduce the Southern Grid’s CO2 emissions by up to 10% owing to more efficient thermal dispatch and avoided hydro/renewable curtailment. The benefits of regional electricity markets with expanded transmission likely will increase as China’s renewable generation increases. |
Journal |
Resources, Conservation and Recycling
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Volume |
153
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Year of Publication |
2020
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Pagination |
104558
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ISSN Number |
09213449
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Short Title |
Resources, Conservation and Recycling
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Keywords | |
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File(s) | |
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