How to promote the trading in China's green electricity market? Based on environmental perceptions, renewable portfolio standard and subsidies

Abstract

The behavior evolution of market players is crucial to promoting green electricity trading. This paper develops an evolutionary game model of China's green electricity market to analyze the strategic interactions among players. The model incorporates key variables such as renewable energy subsidies, renewable energy quotas, and environmental perceptions. Then, a system dynamics simulation model is constructed, and simulation experiments are designed to reveal the influence of key factors on the evolutionary path. The results indicate that: (1) Players exhibit varying sensitivities to green electricity prices under different trading modes. (2) Renewable energy projects with high subsidy intensity have no willingness to enter the market if the benefits of participating in the green electricity market cannot surpass subsidies. (3) The evolutionary stabilization trend depends on users' environmental perceptions, and the environmental perception effect exhibits a diminishing marginal trend. (4) The implementation of renewable portfolio standard is an effective way to promote green electricity trading, especially when there is a high green electricity premium. (5) There is a trade-off between low incentive participation and high incentive coefficients in the system. These findings provide valuable policy recommendations for effectively promoting green electricity trading in China.