Low Carbon Strategies of Electric Power Sector in Shandong Province: Marginal Abatement Costs Analysis

Abstract

With the urgent to carry out a low carbon pathway of the electric power sector for Shandong province to face the heavy burden of the emission reduction, it is necessary to analyze the margin abatement costs (MAC) of its low carbon technologies. In this article, we adopted the MAC method with a scenario analysis to point out the margin abatement costs and investment intensity of 9 kinds of major low carbon technologies in electric power sector in 2030. The results show that The IGCC+CCS+EOR, coal optimal scheduling, nuclear power technologies are with negative MAC in the Mitigation Scenario in 2030; while biomass combustion, biogas power generation, onshore wind power, solar photovoltaic, IGCC, offshore wind power, IGCC+CCS is positive. Therefore, for the lower marginal abatement cost and investment intensity technologies such as nuclear power and coal optimal scheduling, only some reasonable policies and economic incentives will promote their applications. On the other hand, for the higher marginal abatement cost and investment intensity technologies, like the renewable energy power technologies, it will have to need an initial investment subsidies, price subsidies, carbon trading, carbon taxes or other fiscal mechanisms to encourage market mechanisms.