Investment Efficiency and Cost Analysis of New Renewable Energy Sources

Abstract

Developing clean energy has become the key factor for China's energy transformation, and an important pathway to mitigating climate change, as well as one of the critical measures to achieve the goal of non-fossil energy consumption, with significant environmental and social benefits. Despite coal-fired power sources' dominance in China's power system, renewable energy sources such as wind and solar power, known as new renewable energy, now account for 20% of China's total installed capacity and 8% of the total electricity production. Over the past decade, China has been deploying more new renewable energies, and is now making greater efforts to integrate more renewable potential. To further clarify the life-cycle cost of different new renewable technologies and promote renewable energy utilization, this paper presents the investment efficiency and cost analysis of new renewable energy sources. First, this paper briefly reviews China's new renewable energy market situations, such as installed capacity, capacity factor, and pricing. Then, cost analysis and investment efficiency of new renewable energy technologies facing subsidy-free parity prices are studied, based on which workable price domain and investment proposals are presented. The numerical example results show that, with a downward trend of feed-in tariff and rising demand for parity prices, new renewable energy companies can still achieve win-win outcomes in generating at subsidy-free grid-parity prices and reasonably recovering their investment costs.