Abstract
Among the regulatory policies, feed-in tariffs (FIT) and renewable portfolio standards (RPS) are the most popular to promote the development of renewable energy power industry. They can significantly contribute to the expansion of domestic industrial activities in terms of sustainable energy. In this paper, we synthetically consider various important factors with the analysis of the existing literature, and use system dynamics (SD) to establish models of long-term development of the renewable energy power industry under FIT and RPS schemes. The model not only clearly shows the complex logical relationship between the factors but also reveals the process of coordination between the two policy tools in the development of the renewable energy power industry. In addition, as an example of development of renewable energy industry, the paper studies the development of China’s photovoltaic power industry under different scenarios. The models proposed in this paper can provide a reference for scholars to study development of the renewable energy power industry in different countries, thereby facilitating an understanding of the renewable energy power’s long-term sustainable development pattern under FIT and RPS schemes, and helping to provide references for policy-making institutions. The results show that in the perfect competitive market, the implementation of RPS can promote long-term and rapid development of China’s photovoltaic power industry given the constraints and actions of the mechanisms of RPS quota proportion, the TGC valid period, and fines, compared with FIT. At the end of the paper, policy implications are offered as references for the government.
Highlights
The models proposed in this paper can provide a reference for scholars to study development of the renewable energy power industry in different countries, thereby facilitating an understanding of the renewable energy power’s long-term sustainable development pattern under feed-in tariffs (FIT) and renewable portfolio standards (RPS) schemes, and helping to provide references for policy-making institutions
The development of the renewable energy power industry under FIT and RPS represents a dynamic system that contains a range of factors, including investment, cost, installed capacity, quota, tradable green certificates (TGC) price, and TGC demand and supply (Figure 1)
To study the impact of policy on the long-term development of the industry, this study considers the actual situation in China, and assumes that the simulation time is 10 years, or 120 months, and that the start time is January 2016
Summary
Countries around the world have developed many technologies and proposed various policies to promote the development of renewable energy such as large-scale energy storage [1], feed-in tariffs (FIT) and renewable portfolio standards (RPS). Large-scale energy storage is a practical solution in adopting renewable energy resources in power grid as an important technology [2], and many countries have considered it as a viable solution to increase the contribution of renewable energy resources [3,4]. Renewable energy policies can significantly contribute to the expansion of domestic industrial activities in terms of sustainable energy [5]. More than 60 countries and regions worldwide have implemented one or other of the two policies [6]. FIT and RPS have common attributes, in that both are policy tools with dual characteristics of government intervention and market regulation
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