Economic impact of the POP mode on distribution network reconstruction in the ‘coal‐to‐electricity’ project of the grid company in China: a new electricity transaction mode

The ‘coal to electricity’ carried out by the grid company has had poor economic performance during its life cycle. This paper aims to investigate the economic impact of the package deal of off‐peak electricity transaction mode (POP) on the ‘coal‐to‐electricity’ project in comparison with peak and valley electricity price (PVP). The incremental net present value and the incremental benefit–cost ratio are selected as the main economical evaluating indicators. Taking a coal‐to‐electricity project in a region of Beijing, China, as an example to study the economic benefit of the grid company in POP. The results indicate that the economic benefit of the grid company is increased by 48% in POP compared to that in PVP. The incremental benefit–cost ratio is less than 1, which demonstrates that POP is conducive to improving the current loss status of the grid company. It is helpful to raise the grid company's enthusiasm for conducting the coal‐to‐electricity project. Finally, corresponding suggestions are put forward to help the grid company in improving the negative economic benefit. © 2019 Society of Chemical Industry and John Wiley & Sons, Ltd.