China Energy Outlook 2020 - Flipbook - Page 156
dispatch and avoided hydro/renewable curtailment. The benefits of regional electricity markets
with expanded transmission likely will increase as China’s renewable generation increases.
Lin, J., Kahrl, F., Yuan, J., Liu, X., and Zhang, W. "Challenges and strategies for electricity market
transition in China" Energy Policy 133 (2019) 110899.
https://doi.org/10.1016/j.enpol.2019.110899
Abstract. China is currently pursuing electricity reforms that will create wholesale markets for
electricity. Electricity markets hold considerable promise for facilitating China's transition to
clean energy systems, but face obstacles. The most significant obstacle to market reforms is
their potential financial impact on coal generation, which currently accounts for most of China's
generating capacity. In this paper, we examine the impact of market reforms on coal generation
in China, using Guangdong Province as a case study. We find that, in the near term, market
prices are likely to lead to significant decreases in net revenues for coal generators relative to
the current benchmark tariff, with 40%–60% of coal generation capacity unable to cover the
cost of remaining in commercial operation. We estimate that existing coal generators in
Guangdong had 94 billion yuan (US$14 billion) in outstanding debt in 2016, creating large risks
for banks and raising questions about the potential impacts of electricity market reforms on
China's financial industry. The impact of market reforms on coal generators creates two
problems—transition and resource adequacy. The development of mechanisms for long-term
resource adequacy provides a common solution to both of these problems.
Hu, J., Yan, Q., Li, X., Jiang, Z.Z., Kahrl, F., Lin, J., and Wang, P. "A cooperative game-based
mechanism for allocating ancillary service costs associated with wind power integration in
China" Utilities Policy 58 (2019) 120 - 127. https://doi.org/10.1016/j.jup.2019.05.008
Abstract. Wind power in China is developing rapidly. However, wind power curtailment has
become increasingly severe, reaching 15% in 2015. The root cause of wind power curtailment in
China is that its power system has insufficient flexibility. We analyze how to achieve a
reasonable allocation of ancillary service costs for wind power plants, using a cooperative game
approach. The analysis shows that, while the current allocation approach in the Beijing, Tianjin,
and Tangshan power grid is based only on wind feed-in tariffs, an allocation method based on
both the feed-in tariff and the capacity credit of wind would be more reasonable.
Lin, J., Kahrl, F., Yuan, J., Chen, Q., and Liu, X. "Economic and carbon emission impacts of
electricity market transition in China: A case study of Guangdong Province" Applied Energy
238 (2019) 1093 - 1107. https://doi.org/10.1016/j.apenergy.2019.01.128
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