Cost-Effective Analysis of Carbon Abatement Options in China's Electricity Sector

Abstract

This article attempts to shed light on technological aspects of carbon abatement in China's power industry and is thus devoted to satisfying electricity planning requirements in the CO2 context To that end, a technology-oriented dynamic optimization model for power system expansion planning has been developed. Fifteen types of power plants are represented explicitly in the model in terms of their technical, economic, and environmental characteristics. These plants have first been compared in terms of both the levelized cost of generation and the marginal cost of CO2 reduction. Driven by the baseline electricity demands that are estimated by a newly developed time-recursive dynamic computable general equilibrium model of the Chinese economy, the power planning model has then been used to develop the baseline scenario for China's electricity supply and to analyze the impacts of compliance with CO2 limits in the power industry.