Optimization of power generation structure and electricity transmission pattern in China based on the electricity-carbon coordinated market

Zhengyuan Zhai, Lei Zhang, Yadong Wang, Xiaochao Hou and Qing Yang

Renewable Energy, 2025, vol. 252, issue C

Abstract: To achieve the goals of “carbon peaking and carbon neutrality”, China is advancing the green transformation of its energy system by increasing the share of green energy in its power generation structure and promoting the efficient utilization of wind and solar resources in the western regions through inter-regional power transmission. In this context, the government is exploring a synergistic mechanism between the carbon emissions trading (CET) market and the electricity market (EM) to leverage market efficiency in resource allocation, accelerate emission reductions, and facilitate large-scale integration of green electricity. This study investigates the impact of electricity-carbon coordinated market (ECCM) on China’s power generation structure and transmission patterns. It proposes an electricity-carbon price linkage mechanism incorporating carbon allowance (CA) control and allocation and the supply-demand dynamics of the CET market. Based on this mechanism, a national ECCM optimization model that spans mid-to-long-term and spot trading stages is developed. The model takes provinces as spatial nodes and includes multiple types of energy producers as participants. Using this model, simulation analyses of China’s power generation structure and power transmission patterns with high-frequency real data are conducted. The results indicate that compared to EM, ECCM further increases the share of wind and photovoltaic power in power generation structure, particularly in the northwest region. Additionally, it expands the scale of cross-regional electricity transmission, enabling efficient transmission of wind and photovoltaic power from the western regions to the eastern regions. Furthermore, carbon reduction policies can effectively influence the operation of ECCM. These findings can assist policymakers in enhancing green power production and transmission capacity by controlling the total amount and allocation of CA, expanding transmission channels, and leveraging the ECCM to gradually achieve carbon reduction and green power consumption goals.

Keywords: Electricity-carbon coordinated market; Renewable energy consumption; Carbon emission reduction; Inter-regional green power transmission; Two-stage spatial optimization (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:252:y:2025:i:c:s0960148125010213

DOI: 10.1016/j.renene.2025.123359

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