Design and Evaluation of Environmental Value Mechanisms for Green Power Considering Carbon Reductions

Yan Lu, Mengmeng Zhang, Lei An, Pengyun Geng, Lili Liu () and Tiantian Feng
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Yan Lu: State Grid Jibei Electric Power Company Limited Economic Research Institute, Beijing 100053, China
Mengmeng Zhang: State Grid Jibei Electric Power Company Limited Economic Research Institute, Beijing 100053, China
Lei An: State Grid Jibei Electric Power Company Limited Economic Research Institute, Beijing 100053, China
Pengyun Geng: State Grid Jibei Electric Power Company Limited Economic Research Institute, Beijing 100053, China
Lili Liu: School of Economics and Management, China University of Geosciences Beijing, Beijing 100083, China
Tiantian Feng: School of Economics and Management, China University of Geosciences Beijing, Beijing 100083, China

Energies, 2025, vol. 18, issue 13, 1-20

Abstract: Under the global context of addressing climate change and actively promoting energy transition, green power has become increasingly vital in the energy structure due to its clean and sustainable advantages. However, the development of green power’s environmental value faces multiple challenges that hinder its marketization. This study first systematically analyzes the current status of developing the environmental value of green power and identifies existing issues. Second, it designs a green power environmental value mechanism and constructs a quantitative model from the perspective of coal-fired power carbon abatement costs, analyzing the emission reduction value of green power in replacing different types of coal-fired power generation. The results show the following: (1) When power generation types are not differentiated, the environmental value exhibits significant seasonal variations. (2) The environmental value for coal-fired units above 300 MW is lower than the overall average, while that of gas-fired units falls between coal-fired units and the average; the environmental value of generating units with a capacity of 300 MW or less is the lowest, followed by that of unconventional coal-fired units. (3) The environmental value calculated based on the marginal carbon abatement cost of coal-fired units, is slightly higher than the tradable green certificate (TGC) price. This study provides policy support for promoting the low-carbon transition of the power sector and facilitating the development of a green power trading market.

Keywords: tradable green certificate price; green power environmental value; marginal carbon abatement cost; mechanism design and evaluation (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: 2025
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