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How does soaring natural gas prices impact renewable energy: A case study in China

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  • Wang, Guotao
  • Liao, Qi
  • Li, Zhengbing
  • Zhang, Haoran
  • Liang, Yongtu
  • Wei, Xuemei

Abstract

With the promotion of renewable energy, natural gas's advantage is being cut as its prices fluctuate largely. This study proposes a robust mathematical model to simulate the changes in electricity structure and hydrogen supply with the fluctuation of natural gas prices. The simulation model is applied to explore the impact of soaring natural gas prices on the electricity market in China. The results demonstrate that high natural gas prices are more likely to promote the development of low-cost nonrenewable power generation rather than renewable power generation under a policy of low-carbon tax. Coal power still dominates the electricity market with a share of 42% and accounts for 66% in hydrogen production due to its low price and mature craftsmanship. Natural gas is the indispensable transitional energy for the transformation of the power structure despite its high prices, occupying 17% in the electricity market and 15% in hydrogen production. In conclusion, fossil energy will gradually change from direct combustion and utilization to the production of renewable energy such as hydrogen energy. Finally, policy recommendations for the structure of the electricity market and the supply of hydrogen energy are proposed.

Suggested Citation

  • Wang, Guotao & Liao, Qi & Li, Zhengbing & Zhang, Haoran & Liang, Yongtu & Wei, Xuemei, 2022. "How does soaring natural gas prices impact renewable energy: A case study in China," Energy, Elsevier, vol. 252(C).
    • Handle: RePEc:eee:energy:v:252:y:2022:i:c:s036054422200843x
    DOI: 10.1016/j.energy.2022.123940
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    Cited by:

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    3. Wang, Tiantian & Qu, Wan & Zhang, Dayong & Ji, Qiang & Wu, Fei, 2022. "Time-varying determinants of China's liquefied natural gas import price: A dynamic model averaging approach," Energy, Elsevier, vol. 259(C).
    4. Wang, Guotao & Zhao, Wei & Qiu, Rui & Liao, Qi & Lin, Zhenjia & Wang, Chang & Zhang, Haoran, 2023. "Operational optimization of large-scale thermal constrained natural gas pipeline networks: A novel iterative decomposition approach," Energy, Elsevier, vol. 282(C).
    5. Chuliá, Helena & Klein, Tony & Muñoz Mendoza, Jorge A. & Uribe, Jorge M., 2024. "Vulnerability of European electricity markets: A quantile connectedness approach," Energy Policy, Elsevier, vol. 184(C).
    6. Wang, Guotao & Zhou, Yifan & Lin, Zhenjia & Zhu, Shibo & Qiu, Rui & Chen, Yuntian & Yan, Jinyue, 2024. "Robust energy management through aggregation of flexible resources in multi-home micro energy hub," Applied Energy, Elsevier, vol. 357(C).
    7. Armenia Androniceanu & Oana Matilda Sabie, 2022. "Overview of Green Energy as a Real Strategic Option for Sustainable Development," Energies, MDPI, vol. 15(22), pages 1-35, November.
    8. Ogali, Oscar I.O. & Okoro, Emeka E. & Olafuyi, Saburi G., 2023. "Assessing consensus on nexus between natural gas consumption and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).

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