Exploring biomass power generation’s development under encouraged policies in China

Abstract

Biomass power generation is a resource-friendly, environment-friendly industry that requires policy support. Our contribution lies in that we proposed a system dynamics model to analysis the development of biomass power generation under emission trading scheme and investment subsidy in China. To our best knowledge, there is no research about this issue by system dynamics now. We found that (1) Due to the resource limitation, the trends of installed capacity of straw and waste incineration power generation in all scenarios are characterized by an “S” shape. (2) In the early stages of development, when two policies are issued simultaneously, they can reinforce each other. As time goes by, when biomass power generation is basically mature, two kinds of policies will weaken each other. (3) The change of investment subsidy has a greater impact than the change of emission trading price. In addition, waste and straw power generations are more sensitive to an increased subsidy than to a decreased subsidy. Waste power is more sensitive to an increased permit price, while straw power is more sensitive to a decreased permit price. The results and policy implications in this paper can help Chinese government to establish policy schemes for developing biomass power generation.