 Low or No subsidy? Proposing a regional power grid based wind power feed-in tariff benchmark price mechanism in ChinaRuixiaoxiao Zhang, Koji Shimada, Meng Ni, Geoffrey Q.P. Shen and Johnny K.W. Wong Energy Policy, 2020, vol. 146, issue C Abstract: The Chinese government plans to adopt a low or no subsidy policy mechanism on renewable energy power development in the future. To achieve a balance between reducing financial burden on the government and ensuring profitability of investors as well as to account for the regional differences in China, a novel regional wind power grid feed-in tariff benchmark price mechanism by Net Present Value (NPV) method and Real Option (RO) method is proposed in this paper. The results voice support on the appropriateness of gradually decreasing the wind feed-in tariff (FIT) benchmark price to as low as the coal-fired FIT. The proposed FIT price level is presented as a price range on the basis of a guaranteed Internal Rate of Return (IRR) falls in between 8% to 15% for wind power investors. The results indicate that the current FIT price should be readjusted and redistributed. Although the FIT price in Central and South China grids is recommended to be relatively high, the NPV of wind farm project value in six regional grids are at the same level. Keywords: Feed-in tariff; Net present value; Real option; Regional power grids (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:146:y:2020:i:c:s030142152030481x DOI: 10.1016/j.enpol.2020.111758 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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