Which policy can promote renewable energy to achieve grid parity? Feed-in tariff vs. renewable portfolio standards

Zhao Xin-gang, Li Pei-ling and Zhou Ying

Renewable Energy, 2020, vol. 162, issue C, 322-333

Abstract: China’s electricity market reform poses an urgent demand for grid parity of renewable energy (RE), however, the high initial investment cost makes it difficult to achieve. Although feed-in tariff (FIT) and renewable portfolio standards (RPS) schemes are both practical policy tools to support the development of the RE industry, which policy is more consistent with the goal of grid parity? Accordingly, based on the system dynamic model, this research studies the levelized cost of RE (LCOE) under FIT and RPS, respectively. The results show that: First, under the current FIT scheme, wind (onshore) and photovoltaic (PV) power both cannot achieve grid parity. To realize it, extra payouts in four categories of areas should at least be 0.236, 0.244, 0.299 and 0.261 CNY/kWh. Similarly, additional subsidies for PV in Tibet and the northwest region except Tibet need to be 0.924 and 0.764 CNY/kWh. Second, under the RPS, wind (onshore) power can basically achieve grid parity, but PV cannot. Subsidies for PV need at least to be 0.525 and 0.364 CNY/kWh to achieve grid parity. Therefore, compared with the current FIT in China, the policy combination of FIT and RPS adjusted to local conditions is more conducive to realizing grid parity.

Keywords: Grid parity; Levelized cost of electricity; Renewable portfolio standards; Green certificate; Feed-in tariffs (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960148120312994
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:renene:v:162:y:2020:i:c:p:322-333

DOI: 10.1016/j.renene.2020.08.058

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

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