Integrated Modeling the Transition Pathway of China’s Power System

Abstract

Accelerating decarbonization of the power system is at the heart of achieving China’s carbon neutrality goal and mitigating global climate change. However, deploying multi-terawatts of variable renewable energy (VRE) may result in substantial system volatility. Here, using a temporally and spatially resolved model co-optimizing capacity expansion and system operation throughout the full 8,760 hours in a planning year, we show that achieving −550 MtCO2/yr of negative emissions is feasible for China’s power system by 2060 with 6,000 GW of VRE, 5,800 GWh of energy storage, and 850 MtCO2/yr of carbon capture and sequestration (CCS), at the marginal carbon abatement cost of 750–1,100 yuan/tCO2 (about 108–157 $/tCO2). Multi-millions of hectares of land areas are necessary to accommodate the TW-scale installation of solar photovoltaic panels, with restricted land policies resulting in a 3.3% increase in electricity costs. System volatility also surges with higher penetration of VRE, represented by increasing variability in hourly marginal demand cost, necessitating firm resources to ensure capacity adequacy. Although these firm sources can earn higher generation revenues in peak hours, capacity compensation amounts to hundreds of yuan/kW (about tens of $/kW) per year is still needed. Effective planning and policy formulation are essential to support China’s decarbonization effort for its power sector.