[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v74y2018icp330-342.html
   My bibliography  Save this article

Economic dispatch savings in the coal-fired power sector: An empirical study of China

Author

Listed:
  • Wei, Yi-Ming
  • Chen, Hao
  • Chyong, Chi Kong
  • Kang, Jia-Ning
  • Liao, Hua
  • Tang, Bao-Jun
Abstract
The current equal share dispatch approach has often been criticized for its negative influence on the electricity system operation in China, which worsens the energy security, environmental sustainability and affordability problems. To provide references for the on-going electricity market reform, this study employs an optimization model to quantify the economic dispatch savings in the coal-fired power sector. Key findings are summarized as follows: (1) The heat rates of 2803 coal generators in China range from 273.91 gce/kWh to 348.38 gce/kWh units in 2014, and the great differences among these generators at different geographical areas exhibit the necessity for economic dispatch. (2) 5.67% of the coal used for power generation could be saved from economic dispatch in a provincial level, the monetary value of which can reduce the average electricity price by 0.0058 yuan/kWh in 2014. (3) Three major political and economic challenges hinder the transition from the current dispatch mode to economic dispatch, namely the insufficient running hours for cost recovery, limited cross-border trading due to electricity over-supply and local protectionism, and the political economy problems from generators of different ownership types.

Suggested Citation

  • Wei, Yi-Ming & Chen, Hao & Chyong, Chi Kong & Kang, Jia-Ning & Liao, Hua & Tang, Bao-Jun, 2018. "Economic dispatch savings in the coal-fired power sector: An empirical study of China," Energy Economics, Elsevier, vol. 74(C), pages 330-342.
    • Handle: RePEc:eee:eneeco:v:74:y:2018:i:c:p:330-342
    DOI: 10.1016/j.eneco.2018.06.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988318302354
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2018.06.017?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Pollitt, M. & Yang, C-H. & Chen, H., 2017. "Reforming the Chinese Electricity Supply Sector: Lessons from International Experience," Cambridge Working Papers in Economics 1713, Faculty of Economics, University of Cambridge.
    2. Chen, Hao & Tang, Bao-Jun & Liao, Hua & Wei, Yi-Ming, 2016. "A multi-period power generation planning model incorporating the non-carbon external costs: A case study of China," Applied Energy, Elsevier, vol. 183(C), pages 1333-1345.
    3. Chattopadhyay, Deb, 2014. "Modelling renewable energy impact on the electricity market in India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 9-22.
    4. Strbac, Goran & Pollitt, Michael & Konstantinidis, Christos Vasilakos & Konstantelos, Ioannis & Moreno, Rodrigo & Newbery, David & Green, Richard, 2014. "Electricity transmission arrangements in Great Britain: Time for change?," Energy Policy, Elsevier, vol. 73(C), pages 298-311.
    5. Ma, Chunbo & He, Lining, 2008. "From state monopoly to renewable portfolio: Restructuring China's electric utility," Energy Policy, Elsevier, vol. 36(5), pages 1697-1711, May.
    6. Kahrl, Fredrich & Williams, Jim & Jianhua, Ding & Junfeng, Hu, 2011. "Challenges to China's transition to a low carbon electricity system," Energy Policy, Elsevier, vol. 39(7), pages 4032-4041, July.
    7. Ciwei, Gao & Yang, Li, 2010. "Evolution of China's power dispatch principle and the new energy saving power dispatch policy," Energy Policy, Elsevier, vol. 38(11), pages 7346-7357, November.
    8. Tuohy, Aidan & Meibom, Peter & Denny, Eleanor & O'Malley, Mark, 2009. "Unit commitment for systems with significant wind penetration," MPRA Paper 34849, University Library of Munich, Germany.
    9. Newbery, David M., 2016. "Towards a green energy economy? The EU Energy Union’s transition to a low-carbon zero subsidy electricity system – Lessons from the UK’s Electricity Market Reform," Applied Energy, Elsevier, vol. 179(C), pages 1321-1330.
    10. Ma, Chunbo & Zhao, Xiaoli, 2015. "China's electricity market restructuring and technology mandates: Plant-level evidence for changing operational efficiency," Energy Economics, Elsevier, vol. 47(C), pages 227-237.
    11. Yuanan Hu & Hefa Cheng, 2017. "Displacement efficiency of alternative energy and trans-provincial imported electricity in China," Nature Communications, Nature, vol. 8(1), pages 1-9, April.
    12. Lynch, Muireann Á. & Shortt, Aonghus & Tol, Richard S.J. & O'Malley, Mark J., 2013. "Risk–return incentives in liberalised electricity markets," Energy Economics, Elsevier, vol. 40(C), pages 598-608.
    13. Reddy, S. Surender & Bijwe, P.R., 2015. "Real time economic dispatch considering renewable energy resources," Renewable Energy, Elsevier, vol. 83(C), pages 1215-1226.
    14. Nikolakakis, Thomas & Chattopadhyay, Deb & Bazilian, Morgan, 2017. "A review of renewable investment and power system operational issues in Bangladesh," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P1), pages 650-658.
    15. Bistline, John E., 2015. "Electric sector capacity planning under uncertainty: Climate policy and natural gas in the US," Energy Economics, Elsevier, vol. 51(C), pages 236-251.
    16. Oggioni, G. & Murphy, F.H. & Smeers, Y., 2014. "Evaluating the impacts of priority dispatch in the European electricity market," Energy Economics, Elsevier, vol. 42(C), pages 183-200.
    17. Moarefdoost, M. Mohsen & Lamadrid, Alberto J. & Zuluaga, Luis F., 2016. "A robust model for the ramp-constrained economic dispatch problem with uncertain renewable energy," Energy Economics, Elsevier, vol. 56(C), pages 310-325.
    18. Kahrl, Fredrich & Williams, James H. & Hu, Junfeng, 2013. "The political economy of electricity dispatch reform in China," Energy Policy, Elsevier, vol. 53(C), pages 361-369.
    19. OGGIONI, Giorgia & MURPHY, Frederic H. & SMEERS, Yves, 2014. "Evaluating the impacts of priority dispatch in the European electricity market," LIDAM Reprints CORE 2554, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    20. Zhao, Xiaoli & Wu, Longli & Zhang, Sufang, 2013. "Joint environmental and economic power dispatch considering wind power integration: Empirical analysis from Liaoning Province of China," Renewable Energy, Elsevier, vol. 52(C), pages 260-265.
    21. Zhong, Haiwang & Xia, Qing & Chen, Yuguo & Kang, Chongqing, 2015. "Energy-saving generation dispatch toward a sustainable electric power industry in China," Energy Policy, Elsevier, vol. 83(C), pages 14-25.
    22. Chen, Hao & Kang, Jia-Ning & Liao, Hua & Tang, Bao-Jun & Wei, Yi-Ming, 2017. "Costs and potentials of energy conservation in China's coal-fired power industry: A bottom-up approach considering price uncertainties," Energy Policy, Elsevier, vol. 104(C), pages 23-32.
    23. Yu, Yanni & Qian, Tao & Du, Limin, 2017. "Carbon productivity growth, technological innovation, and technology gap change of coal-fired power plants in China," Energy Policy, Elsevier, vol. 109(C), pages 479-487.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hao Chen & Chi Kong Chyong & Jia-Ning Kang & Yi-Ming Wei, 2018. "Economic dispatch in the electricity sector in China: potential benefits and challenges ahead," Working Papers EPRG 1819, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. Chen, Hao & Cui, Jian & Song, Feng & Jiang, Zhigao, 2022. "Evaluating the impacts of reforming and integrating China's electricity sector," Energy Economics, Elsevier, vol. 108(C).
    3. Chenxi Xiang & Xinye Zheng & Feng Song & Jiang Lin & Zhigao Jiang, 2023. "Assessing the roles of efficient market versus regulatory capture in China’s power market reform," Nature Energy, Nature, vol. 8(7), pages 747-757, July.
    4. Cao, Jing & Ho, Mun S. & Ma, Rong & Zhang, Yu, 2024. "Transition from plan to market: Imperfect regulations in the electricity sector of China," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 509-533.
    5. Zhang, Yin-Fang & Gao, Ping, 2016. "Integrating environmental considerations into economic regulation of China's electricity sector," Utilities Policy, Elsevier, vol. 38(C), pages 62-71.
    6. Teng, Fei & Wang, Xin & Zhiqiang, LV, 2014. "Introducing the emissions trading system to China’s electricity sector: Challenges and opportunities," Energy Policy, Elsevier, vol. 75(C), pages 39-45.
    7. Lin, Jiang & Kahrl, Fredrich & Yuan, Jiahai & Chen, Qixin & Liu, Xu, 2019. "Economic and carbon emission impacts of electricity market transition in China: A case study of Guangdong Province," Applied Energy, Elsevier, vol. 238(C), pages 1093-1107.
    8. Li, Mingquan & Patiño-Echeverri, Dalia & Zhang, Junfeng (Jim), 2019. "Policies to promote energy efficiency and air emissions reductions in China's electric power generation sector during the 11th and 12th five-year plan periods: Achievements, remaining challenges, and ," Energy Policy, Elsevier, vol. 125(C), pages 429-444.
    9. Hu, Junfeng & Kwok, Gabe & Xuan, Wang & Williams, James H. & Kahrl, Fredrich, 2013. "Using natural gas generation to improve power system efficiency in China," Energy Policy, Elsevier, vol. 60(C), pages 116-121.
    10. Chen, Hao & Geng, Hao-Peng & Ling, Hui-Ting & Peng, Song & Li, Nan & Yu, Shiwei & Wei, Yi-Ming, 2020. "Modeling the coal-to-gas switch potentials in the power sector: A case study of China," Energy, Elsevier, vol. 192(C).
    11. Daraeepour, Ali & Patino-Echeverri, Dalia & Conejo, Antonio J., 2019. "Economic and environmental implications of different approaches to hedge against wind production uncertainty in two-settlement electricity markets: A PJM case study," Energy Economics, Elsevier, vol. 80(C), pages 336-354.
    12. Flavio Menezes & Xuemei Zhang, 2016. "Regulatory Incentives for a Low-Carbon Electricity Sector in China," Discussion Papers Series 562, School of Economics, University of Queensland, Australia.
    13. Zeng, Ming & Yang, Yongqi & Wang, Lihua & Sun, Jinghui, 2016. "The power industry reform in China 2015: Policies, evaluations and solutions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 94-110.
    14. Ahmed, Tofael & Mekhilef, Saad & Shah, Rakibuzzaman & Mithulananthan, N. & Seyedmahmoudian, Mehdi & Horan, Ben, 2017. "ASEAN power grid: A secure transmission infrastructure for clean and sustainable energy for South-East Asia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 1420-1435.
    15. Wu, Xiuqin & Zhao, Jinsong & Zhang, Dayong & Lee, Wen-Chieh & Yu, Chin-Hsien, 2022. "Resource misallocation and the development of hydropower industry," Applied Energy, Elsevier, vol. 306(PA).
    16. Bell, William Paul & Zheng, Xuemei, 2018. "Inclusive growth and climate change adaptation and mitigation in Australia and China : Removing barriers to solving wicked problems," MPRA Paper 84509, University Library of Munich, Germany.
    17. Cui, Qi & He, Ling & Han, Guoyi & Chen, Hao & Cao, Juanjuan, 2020. "Review on climate and water resource implications of reducing renewable power curtailment in China: A nexus perspective," Applied Energy, Elsevier, vol. 267(C).
    18. Kahrl, Fredrich & Williams, Jim & Jianhua, Ding & Junfeng, Hu, 2011. "Challenges to China's transition to a low carbon electricity system," Energy Policy, Elsevier, vol. 39(7), pages 4032-4041, July.
    19. Song Xu & Yiu Hin Martin Lu & Meiheriayi Mutailipu & Kanti Yan & Yaoli Zhang & Staffan Qvist, 2022. "Repowering Coal Power in China by Nuclear Energy—Implementation Strategy and Potential," Energies, MDPI, vol. 15(3), pages 1-27, January.
    20. Zhang, Sufang & Andrews-Speed, Philip & Li, Sitao, 2018. "To what extent will China's ongoing electricity market reforms assist the integration of renewable energy?," Energy Policy, Elsevier, vol. 114(C), pages 165-172.

    More about this item

    Keywords

    Economic dispatch; Energy saving; China; Optimization;
    All these keywords.

    JEL classification:

    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:74:y:2018:i:c:p:330-342. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.