Study on China’s Renewable Energy Policy Reform and Improved Design of Renewable Portfolio Standard

Fugui Dong, Lei Shi, Xiaohui Ding, Yuan Li and Yongpeng Shi
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Fugui Dong: School of Economics and Management, North China Electric Power University, Beijing 102206, China
Lei Shi: School of Economics and Management, North China Electric Power University, Beijing 102206, China
Xiaohui Ding: School of Economics and Management, North China Electric Power University, Beijing 102206, China
Yuan Li: School of Economics and Management, North China Electric Power University, Beijing 102206, China
Yongpeng Shi: School of Economics and Management, North China Electric Power University, Beijing 102206, China

Energies, 2019, vol. 12, issue 11, 1-23

Abstract: China officially implemented the renewable portfolio standard (RPS) on 1 January 2019, and it remains uncertain as to whether this can effectively solve the problem of renewable energy consumption in China and ease the pressure of government subsidies. In order to study the impact of this policy on China’s renewable energy power generation and explore RPS policy that is more suitable for the characteristics of China’s renewable energy, we first develop a revenue function model based on the just released RPS policy to explore the effectiveness of the policy, the feasibility conditions for successful implementation, and the problems that may be encountered during the implementation process. Then, we propose policy recommendations based on the possible problems of the current policy and design an “incremental electricity price” supplementary policy to improve the possibility of successful implementation of the RPS policy. Finally, an evolutionary game model is established to simulate and verify the possibility of successful implementation of the supplementary policy. The main research results are: (1) the essence of the current RPS policy is the comprehensive implementation policy of the RPS and feed-in-tariff (FiT); (2) because of the characteristics of China’s energy structure, the implementation of this policy reform is more resistant; (3) the quantitative research on the revenue function model shows that the current transaction price of the green certificate market is very low, which is not conducive to alleviating the state’s subsidy pressure on renewable energy power generation; and (4) analysis of empirical data shows that the successful implementation of the “incremental electricity price” policy relies on the initial strategies of grid companies and users.

Keywords: renewable portfolio standard (RPS); evolutionary game; green certificates; consumption of renewable energy; subsidies for renewable energy power generation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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