How to develop distributed generation in China: In the context of the reformation of electric power system

Abstract

One purpose of the reformation of electric power system in China is to enable the power system to absorb a higher proportion of renewable energy. Currently, there are still such problems for China's renewable energy as high cost price, poor power regulating ability and insufficient consumptive space. As an important means of developing renewable energy power generation, distributed generation becomes a highlight in this reformation of electric power system. Under the background of reformation in power system, we describe the current overall market situation of distributed generation and the situation of distributed photovoltaic generation in China and further analyze the future policy environment of distributed generation. At the same time, we also analyze the system, technical and economic obstacles in the development of distributed generation. Market designs are made on various aspects like the objective principle, market types (spot market, futures market, financial market, ancillary service market and retail market) and transaction modes (bilateral contract, multilateral transaction platform and power pool). We also build institutional arrangement for smooth transition mechanism, problem-solving mechanism, independent accounting mechanism in power transition and distribution, full acquisition mechanism and Renewable Portfolio Standard. Discussions on the operation mode for the distributed generation are also shown in this paper based on the policies, regulations of the reformation and technical condition (micro-grid). Through our research, we finally put forward five policy proposals to provide support to the development of distributed generation during the reformation.