Without Subsidy, Will Chinese Renewable Energy Power Generation Have a Bright Future?

Abstract

ABSTRACT As installed capacity of Chinese renewable energy (RE) power generation has been expanded rapidly, the gap between subsidies and funds is more and more huge. Chinese government has urgently sought other incentive policies in place of subsidy. Considering incentive policies such as RE quota scheme, green certificate trade, and subsidy in scenarios, the performances of RE power generations in the liberalized power market are measured in this article. Centralized renewable energy (CRE) and distributed renewable energy (DRE) generations are distinguished in this study. The results show that even if the subsidy is canceled, there will be no significant reversal of RE power generation. It is best to terminate subsidies after 48 months. With the interaction of the incentive policies, the on-grid market price is rising initially and then falling. The price of tradable green certificate (TGC) fluctuated with electricity demand. Subsidy influences the demand in the TGC market by affecting the amount of power generated by DRE, thereby affecting the profit of the CRE power generation. In addition, the changes in RE quota not only keep the price of TGC at a stable level, but also make the installed capacity of CRE power generation exceed the installed capacity of traditional energy power generation after 80 months.