Economical-environment impact of electricity substitution of fossil energies in China

Abstract

China has been plagued by hazy weather for a long time. Adjusting the energy consumption structure and reducing fossil energy consumption proportions are key to solving environmental problems. The “Electricity substitution” development strategy advocates “substituting electricity for coal, oil, and gas.” To establish an efficient energy consumption structure, the strategy is conducive to an increase in the proportion of electricity in the terminal energy consumption market. Therefore, it is important to comprehensively compare the economic and environmental substitution benefits of electricity and other fossil energies when promoting the electricity substitution strategy. In this paper, the energy substitution cost evaluation model is established to compare economic benefits, and a life cycle assessment calculation method is used to obtain the environmental benefits of electricity substitution. Based on the calculation results, the environmental benefits are quantified as the economic cost with an environmental value standard. The comprehensive economic-environmental evaluation results obtained reveal that in the three substitution directions, the effect of substituting electricity for fuel oil is the most obvious. The substitution index considering the economic and environmental cost is 5.25%. “Substituting electricity for oil” can be used as a priority area to promote the electricity substitution strategy. The sensitivity analysis results reveal that reducing the proportion of coal-fired power generation, improving the proportion of clean electricity, and making strict financial penalties for creating pollution, can play strong roles in promoting electricity substitution. This paper provides a new research perspective for the comparison between electricity and fossil fuels. The results from this study can provide references for electricity substitution implementation and relevant policy formulation.