Time Limit of Environmental Benefits of Renewable Energy Power Projects—Analysis Based on Monte Carlo Simulation

Nan Shang, Guori Huang, Yuan Leng, Jihong Zhang and Angxing Shen ()
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Nan Shang: Energy Development Research Institute, China Southern Power Grid Co., Ltd., Guangzhou 510663, China
Guori Huang: Energy Development Research Institute, China Southern Power Grid Co., Ltd., Guangzhou 510663, China
Yuan Leng: Energy Development Research Institute, China Southern Power Grid Co., Ltd., Guangzhou 510663, China
Jihong Zhang: Institute of Quality Development Strategy, Wuhan University, Wuhan 430072, China
Angxing Shen: Institute of Quality Development Strategy, Wuhan University, Wuhan 430072, China

Sustainability, 2023, vol. 15, issue 20, 1-14

Abstract: The supply of green electricity certificates (GECs) exceeds the demand, leading to companies being more willing to purchase GECs to meet their emission reduction obligations. However, concerns have been raised about the environmental impact of renewable energy (RE) projects labeled as “greenwashing”. Drawing on the “additionality” theory, we developed a cost model with construction, operation, and discount rates. We utilized cost data from China’s onshore wind and photovoltaic power generation in our study. After 10,000 Monte Carlo simulations, we made the following findings: (1) The environmental benefits of RE power generation diminish over time, and the time limit for judging whether RE projects have additional costs compared with traditional thermal power should be considered; (2) The time limit for marginal environmental effects of China’s onshore wind and photovoltaic power generation is estimated to be 7.65–10.78 years and 5.44–7.25 years, respectively. The analysis methods and ideas proposed in this paper can provide reference for the development of the GEC system in China and even other countries.

Keywords: renewable energy power generation; environmental benefits; cost additionality; time limit; Monte Carlo simulation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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