Optimizing the provincial target allocation scheme of renewable portfolio standards in China

Abstract

Renewable portfolio standards (RPS) is widely regarded as a useful policy tool to steer energy transition. China government has recently released an RPS target allocation scheme to help promote its renewable electricity consumption. Formulating an efficient and equitable RPS target allocation scheme is a vital step to ensure the effectiveness of RPS. In this paper we argue that data envelopment analysis (DEA) can be used to optimize the provincial RPS targets in China from an efficiency perspective. We first evaluate the efficiency of the officially released RPS target allocation scheme and then apply a zero-sum gains DEA model to optimize the scheme. Further, we use the Gini coefficient to verify the merits of the optimized scheme over the official scheme in equity. The results indicate that the renewable electricity consumption responsibility allocated among provinces in the official scheme may suffer efficiency loss. Central, southern, eastern, and southwestern China can obtain more renewable electricity consumption responsibility, while northeastern, northern, and northwestern China should undertake less consumption responsibility. It provides the adjustment direction for RPS targets allocation among provinces which helps optimize the electricity consumption structure.