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Impact of green power trading mechanism on power generation and interregional transmission in China

Author

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  • Yang, Yan-Shen
  • Xie, Bai-Chen
  • Tan, Xu

Abstract

Both green power trading mechanisms and interregional power transmission are effective approaches to increasing renewable energy absorption and reaching net-zero emissions. They attract more attention than ever before in China after the issue of “dual carbon” target in 2020. Few studies have compared the effects of policies incentivizing green power trading and their comprehensive impacts on power transmission. Considering the tradable green certificate (TGC) market, green power (GP) market, and power transmission, this study formulates a high-resolution power market equilibrium model (HREM) to stimulate effects of multi-market scenarios and address the above issues. The results show that: (1) The GP market can significantly promote green power absorption and the TGC market provides a more flexible way for green power trading. (2) The phenomena of inefficient utilization of transmission lines arose in some areas while the demand for transmission capacity emerged in other areas along with the development of green power trading. (3) A combined mechanism of GP and TGC market is the best option for the current situation while an independent power market is the optimal way to boost green power development with sufficient transmission capacity. The results also call for the synergy development of market design and transmission line construction.

Suggested Citation

  • Yang, Yan-Shen & Xie, Bai-Chen & Tan, Xu, 2024. "Impact of green power trading mechanism on power generation and interregional transmission in China," Energy Policy, Elsevier, vol. 189(C).
    • Handle: RePEc:eee:enepol:v:189:y:2024:i:c:s0301421524001083
    DOI: 10.1016/j.enpol.2024.114088
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