Low-carbon transition of China's provincial power sector under renewable portfolio standards and carbon cap

Abstract

Low-carbon transition of the power sector is an important measure to achieve carbon neutrality in China. Renewable portfolio standards (RPS) and carbon cap were implemented to promote energy transition since 2018. It is essential to evaluate influences of different policy mixes on provincial power systems and inter-provincial electricity transmissions for an optimal policy design and implementation under provincial heterogeneity. This study evaluates the effects of RPS targets and carbon cap on low-carbon transition of China's power system. It further analyzes how to achieve low-carbon transition of China's provincial power sectors with these two policies. Different mixes of RPS target and carbon cap were set to assess their impacts on energy structure change, CO2 emissions abatement, and compliance costs. Results show that the RPS policy can significantly promote investments in renewable energy power in China's resource-rich and high-demand provinces. Investment in nuclear power is important in meeting carbon cap constraints. RPS policy and carbon cap have an overlapping effect on low-carbon transition in China's power sector. Moreover, extensive inter-provincial electricity flows could balance the reverse distribution of energy resources and power loads for renewable energy in a cost-effective way.