Evaluating the cost impacts to meet China’s renewable electricity portfolio standard target in 2030

Abstract

ABSTRACT The power sector plays a pivotal role in China’s carbon peak and carbon neutrality targets. To build a low-carbon power system, it is important to develop wind and solar. This study aims to evaluate the economic impacts of the newly launched renewable portfolio standard in 2030 in China using a cost minimization model and an input-output model. The results show that to accomplish the renewable electricity portfolio standard in 2030, the installed wind and solar capacity will have to reach 1451.9 gigawatts (GW) in 2030. The Northeast, Northwest, and North regions will deploy the most installed capacity, and Inner Mongolia will take on the most renewable energy generation tasks. The annual cost of wind and solar development is expected to be 506.6 billion CNY in 2030, 94.7% of which are new construction costs and storage costs. Renewable energy growth will result in a national average electricity price increase of 5.4 CNY¢/kWh compared to 2019, and Heilongjiang, Gansu, and Shanxi are the most affected. The rapid development of renewable electricity in the next decade will increase the Consumer Price Index (CPI) by 0.4%, Producer Price Index (PPI) by 0.9%, and Gross Domestic Product (GDP) deflator by 0.5% in 2030. Based on the results, we propose to improve the electricity market mechanisms, enhance the electricity transmission stability, and develop policies appropriate to local conditions.