Impact of benchmark tightening design under output-based ETS on China's power sector

Hongyu Zhang, Da Zhang, Siyue Guo and Xiliang Zhang

Energy, 2024, vol. 288, issue C

Abstract: China's national Emission Trading System (ETS), which covers the power sector, is a key policy for supporting the low-carbon transformation of the power sector under China's carbon neutrality target. This study improved the portrayal of China's national ETS in the power planning model and characterised its output-based mechanism and special gas-fired power design. The impacts of different output-based ETS designs on the decarbonisation of power systems in China were then explored. The results show that the ETS can effectively peak the emissions of China's power sector earlier and support the application of carbon capture and storage (CCS) technology with slight impact on the average electricity cost. Benchmark tightening by 2%–5% every five years can lead to 3%–7% lower peak emissions of the power sector and deployment of CCS technology in 2025–2030. However, the current ETS design, which covers only coal- and gas-fired power units, plays a limited role in promoting renewable energy development by encouraging power generation by 1.3 % in 2035, with benchmark tightening of 5 % every five years. Distribution effects will occur among technologies and regions and will increase under more stringent benchmarks. Therefore, a moderate benchmark tightening rate is required to balance emission reduction and distribution effects in the near future.

Keywords: Emission trading system; Benchmark; Decarbonisation; Power sector (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544223032267
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:288:y:2024:i:c:s0360544223032267

DOI: 10.1016/j.energy.2023.129832

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().