How does feed-in tariff and renewable portfolio standard evolve synergistically? An integrated approach of tripartite evolutionary game and system dynamics

Abstract

In order to promote the healthy development of renewable energy, China has implemented Feed-in Tariff (FIT) and Renewable Portfolio Standard (RPS). However, due to the differences in natural conditions, social economy and renewable energy development, how does FIT and RPS evolve to achieve the best policy synergy is still a controversial issue. To explore the cooperation and evolution between FIT and RPS, we establish a tripartite evolutionary game model based on regulatory agencies, renewable energy companies and power grid companies to explore the evolution of FIT and RPS, and then combine a game model and a system dynamics model to simulate and analyze the policy effects of FIT and RPS. The findings of the study are: (1) Considering three aspects of the environment, economic benefits, and the consumption of renewable energy, RPS will replace FIT as the main RE policy if the introduction of tradable green certificate market is carried out in an orderly manner. (2) The faster the rate of decline of FIT subsidies and the rate of increase of RPS quotas, the faster the power market will reach stability. (3) It is essential to formulate a reasonable incentive and penalty mechanism in the regulation of the RPS system.