How does soaring natural gas prices impact renewable energy: A case study in China

Guotao Wang, Qi Liao, Zhengbing Li, Haoran Zhang, Yongtu Liang and Xuemei Wei

Energy, 2022, vol. 252, issue C

Abstract: With the promotion of renewable energy, natural gas's advantage is being cut as its prices fluctuate largely. This study proposes a robust mathematical model to simulate the changes in electricity structure and hydrogen supply with the fluctuation of natural gas prices. The simulation model is applied to explore the impact of soaring natural gas prices on the electricity market in China. The results demonstrate that high natural gas prices are more likely to promote the development of low-cost nonrenewable power generation rather than renewable power generation under a policy of low-carbon tax. Coal power still dominates the electricity market with a share of 42% and accounts for 66% in hydrogen production due to its low price and mature craftsmanship. Natural gas is the indispensable transitional energy for the transformation of the power structure despite its high prices, occupying 17% in the electricity market and 15% in hydrogen production. In conclusion, fossil energy will gradually change from direct combustion and utilization to the production of renewable energy such as hydrogen energy. Finally, policy recommendations for the structure of the electricity market and the supply of hydrogen energy are proposed.

Keywords: Natural gas prices; Renewable energy; Electricity market; Hydrogen supply; Robust model (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:252:y:2022:i:c:s036054422200843x

DOI: 10.1016/j.energy.2022.123940

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