Incentive Mechanisms to Integrate More Renewable Energy in Electricity Markets in China

Shuangquan Liu, Yanxuan Huang, Yue Wang, Qizhuan Shao, Han Zhou, Jinwen Wang and Cheng Chen ()
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Shuangquan Liu: Yunnan Power Grid Co., Ltd., Kunming 650011, China
Yanxuan Huang: School of Civil and Hydraulic Engineering, Huazhong University of Science and Technology, Wuhan 430074, China
Yue Wang: School of Civil and Hydraulic Engineering, Huazhong University of Science and Technology, Wuhan 430074, China
Qizhuan Shao: Yunnan Power Grid Co., Ltd., Kunming 650011, China
Han Zhou: Yunnan Power Grid Co., Ltd., Kunming 650011, China
Jinwen Wang: School of Civil and Hydraulic Engineering, Huazhong University of Science and Technology, Wuhan 430074, China
Cheng Chen: Faculty of Electric Engineering, Kunming University of Science and Technology, Kunming 650504, China

Energies, 2023, vol. 16, issue 18, 1-16

Abstract: China has made significant progress in developing renewable energy, but challenges in integrating variable sources like wind, solar, and hydro power persist. Existing research has a regional focus and lacks a comprehensive understanding of integration challenges in specific regions. Moreover, research concentrates on individual energy types rather than multiple sources. Addressing these challenges requires a deeper analysis of market rules, incentives, and mechanisms for integrating numerous renewable energy types. The existing research also overlooks crucial aspects like energy consumption, grid planning, and power market mechanisms. To promote renewable energy integration effectively, policymakers must address these interconnected factors through comprehensive investigations and research efforts. This study proposes tailored solutions to encourage integration in China based on international experiences, such as Brazil’s contract markets and electricity redistribution mechanism, the Nordic spot market, and California’s negative pricing mechanism. The strategies derived from global practices for China’s renewable energy integration include diverse trading mechanisms, expanded contract markets, optimized local consumption, fortified grid infrastructure, and improved market mechanisms.

Keywords: renewable energy consumption; electricity market; market mechanism; spot market (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: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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