Power system is an important part of the energy system, and is the largest source of carbon emissions in China's energy sector, accounting for about 40% of China's carbon emissions. With the economic development and the improvement of people's living standards, China's electricity demand will continue to rise. The carbon dioxide emission reduction methods of power system are economical and efficient, with the cost of wind and solar power generation basically achieving grid parity, and the cost of new energy storage technology significantly decreased. Therefore, low-carbon transition of the power system plays an important role for China to achieve carbon peaking and carbon neutrality.
In recent years, China has strongly supported the low-carbon development of power system. The 13th Five-year Plan set installation targets for hydropower, wind power, solar power and other renewable energy; it gradually phased out outdated coal power production facilities and implemented energy efficiency retrofit to reduce coal consumption of thermal power supply. It also implemented renewable energy feed-in tariff policy to incentivize the development of wind and solar power generation. Through these policies, carbon emissions from China's power sector have been significantly reduced. By 2020, coal consumption of thermal power supply dropped to 305 g coal equivalent/KWh, and the proportion of non-fossil energy in power generation increased to about 34%. The cumulative installed capacity of hydro, wind, and solar PV power all ranked first in the world.
Carbon peaking and carbon neutrality goals put forward higher requirements for low-carbon transformation of China's power system. Wind, solar PV, and other renewable energy power generation and energy storage facilities need to keep sustained fast growth. The low-carbon transformation of China's power system requires efforts in technological advancement, system operation, market design, business model and so on. Scientific and technological innovation plays a fundamental role in promoting the green and low-carbon transformation. It is necessary to develop new technologies both within the power system and across multiple energy systems to ensure the safe and stable operation of the power system. In addition to new technologies, the power system with high wind and solar power penetration also puts forward higher requirements for operation control of power generation, transmission, and distribution. This requires a new power system dispatch and operation scheme. On the one hand, a suitable market mechanism should be designed to ensure the application and cost recovery of the new scheme. On the other hand, the new scheme also brings new business opportunities to enterprises. Appropriate market design is an important support for power system transformation, which will drive the creation of specific business cases of high renewable energy applications. At the same time, various market mechanisms also need to be compatible with each other. The business model generated under market mechanisms will largely stimulate the application of new technologies. It is important to innovate new business models to support the application of renewable energy and make relevant new technologies profitable.
Based on the scientific research strengths of Tsinghua University and the rich investment experience of China Three Gorges Corporation, Tsinghua-CTG Joint Center for Climate Governance and Low-carbon Transformation will study the directions of power market reforms at home and abroad, and analyze the impact of energy and climate policies on the power system and the transition pathway of China's power system in the context of carbon neutrality. The center will identify key technologies, business models, market designs and systems operations that will help power system transformation, provide international experience and research support for energy market reforms that are essential for achievement of carbon peaking and carbon neutrality, and provide prospective judgment for the development direction of China Three Gorges Corporation during the low-carbon transition and market reforms of China’s power sector.
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