Provincial allocation of renewable portfolio standard in China based on efficiency and fairness principles

Abstract

An efficient and equitable allocation scheme for renewable portfolio standard (RPS) quota is of great significance to renewable energy (RE) development and the improvement of the electricity trade market. This study establishes a quota allocation model based on the lowest cost of RE generation to determine the RPS targets (LC-RPS) of 30 Chinese provinces. Subsequently, an index system based on energy consumption, RE resource endowment, historical responsibility, and transmission facilities is constructed to determine the RPS targets (IN-RPS). Finally, the two scenarios mentioned above are compared with the RPS target allocation scenario published by the Chinese government (GM-RPS) and with the NO-RPS scenario. The results show that: Compared with those of GM-RPS and IN-RPS, the power generation cost associated with the LC-RPS is reduced by 8.5% and 49.4%, respectively, and the unit power generation cost is reduced by 9.4 and 39.7 RMB/MWh, respectively; the fairness of the LC-RPS is marginally worse than that of the other three scenarios, but the fairness of the power generation cost is still relative average, thereby demonstrating distribution fairness. This paper appeals to the Chinese government for the perfection of a national renewable energy certificates (REC) trade market and offering additional REC for solar generation.