IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i23p10538-d1534253.html
   My bibliography  Save this article

Cost–Benefit Analysis of Cross-Regional Transmission of Renewable Electricity: A Chinese Case Study

Author

Listed:
  • Zanxin Wang

    (School of Business and Tourism Management, Yunnan University, Kunming 650091, China)

  • Yaqing Liu

    (School of Economics, Yunnan University, Kunming 650091, China)

  • Rui Wang

    (School of Economics, Yunnan University, Kunming 650091, China)

  • Yushang Hu

    (School of Business and Tourism Management, Yunnan University, Kunming 650091, China)

Abstract

While the establishment of a unified regional power market that promotes the optimal use of renewable energy is considered to be a pathway to meeting the policy targets of “carbon peaking” and “carbon neutrality”, the economic feasibility of the power transmission project is not well understood. To fill this gap, this study conducted a cost–benefit analysis of a proposed project that transmits hydropower, photovoltaic power, and/or wind power whose ratios are 100:0:0, 79:13:8, and 65:22:13 in three scenarios from Dian to Yu in China. It was found that the project has economic feasibilities for each scenario; however, this highly depends on its external benefits, discount rates, and transmission quantity. As the ratio of hydropower becomes lower, the net present value decreases from 117.32 billion to 112.99 billion for an annual transmission of 7.498 billion kWh of electricity. Since the substitution of coal-fired power with renewable power contributes the highest benefit to the project, the cross-regional transmission of renewable electricity should be promoted jointly with the internalization mechanism of externalities.

Suggested Citation

  • Zanxin Wang & Yaqing Liu & Rui Wang & Yushang Hu, 2024. "Cost–Benefit Analysis of Cross-Regional Transmission of Renewable Electricity: A Chinese Case Study," Sustainability, MDPI, vol. 16(23), pages 1-21, December.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10538-:d:1534253
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/23/10538/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/23/10538/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sereno, Luigi & Efthimiadis, Tilemahos, 2018. "Capacity constraints, transmission investments, and incentive schemes," Energy Policy, Elsevier, vol. 119(C), pages 8-27.
    2. MacIver, Callum & Bukhsh, Waqquas & Bell, Keith R.W., 2021. "The impact of interconnectors on the GB electricity sector and European carbon emissions," Energy Policy, Elsevier, vol. 151(C).
    3. Chai, Li & Liao, Xiawei & Yang, Liu & Yan, Xianglin, 2018. "Assessing life cycle water use and pollution of coal-fired power generation in China using input-output analysis," Applied Energy, Elsevier, vol. 231(C), pages 951-958.
    4. Reichelstein, Stefan & Sahoo, Anshuman, 2015. "Time of day pricing and the levelized cost of intermittent power generation," Energy Economics, Elsevier, vol. 48(C), pages 97-108.
    5. Nándor Bozsik & András Szeberényi & Norbert Bozsik, 2024. "Impact of Climate Change on Electric Energy Production from Medium-Size Photovoltaic Module Systems Based on RCP Climate Scenarios," Energies, MDPI, vol. 17(16), pages 1-32, August.
    6. Wang, Jinman & Wang, Ruogu & Zhu, Yucheng & Li, Jiayan, 2018. "Life cycle assessment and environmental cost accounting of coal-fired power generation in China," Energy Policy, Elsevier, vol. 115(C), pages 374-384.
    7. Wen, Xin & Sun, Yuanliang & Tan, Qiaofeng & Tang, Zhengyang & Wang, Zhenni & Liu, Zhehua & Ding, Ziyu, 2022. "Optimizing the sizes of wind and photovoltaic plants complementarily operating with cascade hydropower stations: Balancing risk and benefit," Applied Energy, Elsevier, vol. 306(PA).
    8. Brinkerink, Maarten & Gallachóir, Brian Ó & Deane, Paul, 2019. "A comprehensive review on the benefits and challenges of global power grids and intercontinental interconnectors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 107(C), pages 274-287.
    9. Zhang, Qiang & Chen, Wenying, 2020. "Modeling China’s interprovincial electricity transmission under low carbon transition," Applied Energy, Elsevier, vol. 279(C).
    10. Yi, Bo-Wen & Xu, Jin-Hua & Fan, Ying, 2019. "Coordination of policy goals between renewable portfolio standards and carbon caps: A quantitative assessment in China," Applied Energy, Elsevier, vol. 237(C), pages 25-35.
    11. Qu, Xueping & Xu, Aidi, 2023. "Ways to promote investments in sustainable energy utilities in the central Asian regional economic cooperation program region," Utilities Policy, Elsevier, vol. 84(C).
    12. Wang, Xianxun & Virguez, Edgar & Xiao, Weihua & Mei, Yadong & Patiño-Echeverri, Dalia & Wang, Hao, 2019. "Clustering and dispatching hydro, wind, and photovoltaic power resources with multiobjective optimization of power generation fluctuations: A case study in southwestern China," Energy, Elsevier, vol. 189(C).
    13. Reichenberg, Lina & Hedenus, Fredrik & Mattsson, Niclas & Verendel, Vilhelm, 2022. "Deep decarbonization and the supergrid – Prospects for electricity transmission between Europe and China," Energy, Elsevier, vol. 239(PE).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Benxi & Liu, Tengyuan & Liao, Shengli & Lu, Jia & Cheng, Chuntian, 2023. "Short-term coordinated hybrid hydro-wind-solar optimal scheduling model considering multistage section restrictions," Renewable Energy, Elsevier, vol. 217(C).
    2. Tan, Qiaofeng & Nie, Zhuang & Wen, Xin & Su, Huaying & Fang, Guohua & Zhang, Ziyi, 2024. "Complementary scheduling rules for hybrid pumped storage hydropower-photovoltaic power system reconstructing from conventional cascade hydropower stations," Applied Energy, Elsevier, vol. 355(C).
    3. Fei Guo & Bas J. Ruijven & Behnam Zakeri & Shining Zhang & Xing Chen & Changyi Liu & Fang Yang & Volker Krey & Keywan Riahi & Han Huang & Yuanbing Zhou, 2022. "Implications of intercontinental renewable electricity trade for energy systems and emissions," Nature Energy, Nature, vol. 7(12), pages 1144-1156, December.
    4. Tan, Qiaofeng & Zhang, Ziyi & Wen, Xin & Fang, Guohua & Xu, Shuo & Nie, Zhuang & Wang, Yanling, 2024. "Risk control of hydropower-photovoltaic multi-energy complementary scheduling based on energy storage allocation," Applied Energy, Elsevier, vol. 358(C).
    5. Wang, Yanling & Wen, Xin & Su, Huaying & Qin, Jisen & Kong, Linghui, 2023. "Real-time dispatch of hydro-photovoltaic (PV) hybrid system based on dynamic load reserve capacity," Energy, Elsevier, vol. 285(C).
    6. Jia, Zhijie & Wen, Shiyan & Wang, Yao, 2023. "Power coming from the sky: Economic benefits of inter-regional power transmission in China," Energy Economics, Elsevier, vol. 119(C).
    7. Chaoyang Chen & Hualing Liu & Yong Xiao & Fagen Zhu & Li Ding & Fuwen Yang, 2022. "Power Generation Scheduling for a Hydro-Wind-Solar Hybrid System: A Systematic Survey and Prospect," Energies, MDPI, vol. 15(22), pages 1-31, November.
    8. Haonan Zhang & Xingping Zhang & Jiahai Yuan, 2020. "Coal power in China: A multi‐level perspective review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 9(6), November.
    9. Yuqi Su & Yi Liang & Li Chai & Zixuan Han & Sai Ma & Jiaxuan Lyu & Zhiping Li & Liu Yang, 2019. "Water Degradation by China’s Fossil Fuels Production: A Life Cycle Assessment Based on an Input–Output Model," Sustainability, MDPI, vol. 11(15), pages 1-12, July.
    10. Mengzhu Xiao & Manuel Wetzel & Thomas Pregger & Sonja Simon & Yvonne Scholz, 2020. "Modeling the Supply of Renewable Electricity to Metropolitan Regions in China," Energies, MDPI, vol. 13(12), pages 1-31, June.
    11. Abadie, Luis Mª & Chamorro, José M., 2023. "Investment in wind-based hydrogen production under economic and physical uncertainties," Applied Energy, Elsevier, vol. 337(C).
    12. Bertolini, Marina & D'Alpaos, Chiara & Moretto, Michele, 2018. "Do Smart Grids boost investments in domestic PV plants? Evidence from the Italian electricity market," Energy, Elsevier, vol. 149(C), pages 890-902.
    13. Cui, Qi & He, Ling & Han, Guoyi & Chen, Hao & Cao, Juanjuan, 2020. "Review on climate and water resource implications of reducing renewable power curtailment in China: A nexus perspective," Applied Energy, Elsevier, vol. 267(C).
    14. Xiaonan Wang & Licheng Wang & Jianping Chen & Shouting Zhang & Paolo Tarolli, 2020. "Assessment of the External Costs of Life Cycle of Coal: The Case Study of Southwestern China," Energies, MDPI, vol. 13(15), pages 1-26, August.
    15. Zheng Lu & Yunfei Chen & Qiaoqiao Fan, 2021. "Study on Feasibility of Photovoltaic Power to Grid Parity in China Based on LCOE," Sustainability, MDPI, vol. 13(22), pages 1-14, November.
    16. Zheqi Yang & Xuming Dou & Yuqing Jiang & Pengfei Luo & Yu Ding & Baosheng Zhang & Xu Tang, 2022. "Tracking the CO 2 Emissions of China’s Coal Production via Global Supply Chains," Energies, MDPI, vol. 15(16), pages 1-10, August.
    17. Li, Yuan & Zhou, You & Yi, Bo-Wen & Wang, Ya, 2021. "Impacts of the coal resource tax on the electric power industry in China: A multi-regional comprehensive analysis," Resources Policy, Elsevier, vol. 70(C).
    18. Xue, Jian & Guo, Na & Zhao, Laijun & Zhu, Di & Ji, Xiaoqin, 2020. "A cooperative inter-provincial model for energy conservation based on futures trading," Energy, Elsevier, vol. 212(C).
    19. Mahmud, M. A. Parvez & Huda, Nazmul & Farjana, Shahjadi Hisan & Lang, Candace, 2019. "A strategic impact assessment of hydropower plants in alpine and non-alpine areas of Europe," Applied Energy, Elsevier, vol. 250(C), pages 198-214.
    20. Jin, Jingliang & Wen, Qinglan & Cheng, Siqi & Qiu, Yaru & Zhang, Xianyue & Guo, Xiaojun, 2022. "Optimization of carbon emission reduction paths in the low-carbon power dispatching process," Renewable Energy, Elsevier, vol. 188(C), pages 425-436.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10538-:d:1534253. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.