An inter-provincial spontaneous cooperation mechanism design for renewable energy electricity consumption under the weight of consumption responsibility policy

Laijun Zhao, Juntao Zhen, Chenchen Wang, Youfeng Cheng, Hongru Yi, Ke Wang, Lijun Zeng and Jian Xue

Economic Analysis and Policy, 2025, vol. 87, issue C, 2311-2329

Abstract: The spatial mismatch between renewable power supply and demand in China creates various costs and pressures for provinces to meet their green electricity consumption targets under the current independent consumption model (ICM). To address this dilemma, this study designs an inter-provincial spontaneous cooperation consumption mechanism, which includes constructing a cooperative consumption model (CCM) and designing incentive mechanisms to promote spontaneous cooperation. Firstly, a Generalized Nash Equilibrium (GNE) model is constructed for inter-provincial cooperative consumption of green electricity, considering the "certificate-electricity integration" mechanism for green electricity trading. Secondly, we analyzed the existence and uniqueness of solutions for the GNE model and developed a method for solving it. In addition, we established a consumption volume transfer fee to promote spontaneous cooperation. Finally, we conducted an empirical study in a cooperative region that consisted of Beijing, Shandong, Shaanxi, and Inner Mongolia. Under the CCM, the provinces' total cost decreased by 141.646×108 CNY (9.618 %), and found that a unit consumption volume transfer fee priced between 0.476 CNY/kWh and 0.550 CNY/kWh effectively promoted the spontaneous cooperation. Our cooperation mechanism would help Chinese provinces develop economically viable consumption strategies and alleviate the pressure on provinces scarce in renewable energy to meet their consumption targets.

Keywords: Green electricity consumption targets; Green electricity trading; Cooperative completion model generalized Nash equilibrium (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:87:y:2025:i:c:p:2311-2329

DOI: 10.1016/j.eap.2025.08.017

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