The development of the renewable energy power industry under feed-in tariff and renewable portfolio standard: A case study of China's wind power industry

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. This paper uses system dynamics (SD) to establish models of long-term development of the renewable energy power industry under FIT and RPS schemes, and provides a case study of China's wind power industry by using scenario analysis method. The model, on the one hand, 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. On the other hand, it provides a reference for scholars to study similar problems 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 the integrate implementation of FIT and RPS can promote long-term and rapid development of China's wind power industry given the constraints and actions of the mechanisms of RPS quota proportion, the tradable green certificates (TGC) valid period, and fines. In addition, in the period of the construction of the TGC market, RPS quota growth rate and fine have a no significant effect on industrial development, however, with TGC market game becoming more and more fierce, both of them have a significant positive impact on the long-term development of the industry. TGC valid period has little effect on industrial development in our study. At the end of the paper, policy implications are offered as references for the government.