From feed-in tariff to renewable portfolio standards: An evolutionary game theory perspective

Abstract

China is experiencing renewable energy support schemes evolution from feed-in tariff (FIT) to renewable portfolio standards (RPS) scheme, which can be significantly influenced by renewable and conventional electricity producers strategies. This paper applies evolutionary game theory and system dynamics (SD) model to examine electricity producers strategies in this scheme context. We utilize the data from Chinese wind power industry for simulation to represent evolution of strategies, and research impacts of scheme parameters (subsidy, quota, and fine) on electricity producers and tradable green certificate (TGC) market operation. The results show that, to ensure all the electricity producers willing to trade TGC, scheme parameters should be within a reasonable range. Moreover, the stage descent mode of subsidy and higher level of fine will help the electricity producers accept the RPS scheme as soon as possible and promote the scale of TGC transaction, but the quota requirement should be avoided too low. At the end of the paper, policy implications are offered as references for the government.