Renewable energy quota system: very close and far away, the point of action should be on the demand
The "National Energy Development Strategy Action Plan" (2014-2020) clearly stated that by 2020, China's non-fossil energy should account for 15% of the primary energy consumption. To achieve this strategic goal, renewable energy represented by wind power and solar power is indispensable. However, after experiencing the unprecedentedly serious curtailment of wind and light in 2016, the reform of the renewable energy policy mechanism is imminent.
A breakdown of foreign renewable energy incentive policies can be divided into two categories: one is the fixed electricity price model, which supports the development of renewable energy through electricity price subsidies; the other is the "renewable energy quota system + green certificate transaction" model. With the phenomenon of curtailment of wind and photovoltaics increasing unabated, and subsidy funds are difficult to put in place, there are more and more domestic discussions on the latter policy model.
In China, since the renewable energy quota system was officially proposed in 2009, there have been more discussions than actions, more debates than consensus, and it has not yet been formally implemented. In February this year, the National Development and Reform Commission, the Ministry of Finance, and the National Energy Administration jointly issued the "Notice on the Trial Implementation of Renewable Energy Green Power Certificate Issuance and Voluntary Subscription Transaction System". To the "dawn". However, the current understanding of the renewable energy quota system by government departments is not in place. To make this system truly work, it is necessary to fully understand its operating mechanism on the basis of drawing on international experience.
The point of action should be on the demand side
RPS is a policy that focuses on the demand side rather than stimulating the supply side. More than 30 states in the United States have implemented renewable energy quota systems, most of which are not power generation companies, but the counterparty of power generation companies—the power purchaser, which stipulates that power purchasers in the wholesale electricity market must pay for the power they purchase. A certain percentage or amount of energy must come from renewable energy. This is very important. If we blindly stimulate the supply side and make demands on power generation companies, the generated electricity will not be connected to the grid, which will only make the phenomenon of wind and solar curtailment that has plagued the energy industry for many years more and more serious. Raise requirements for the demand side. In order to meet the legal requirements, the demand side will naturally search for and purchase renewable energy power through the market. In this way, power generation companies and independent power producers who focus on renewable energy development will have a market, and they will have the motivation to continue to develop Renewable Energy.
The current domestic relevant policies have not paid much attention to this point. In April 2016, the National Energy Administration, which is eager to develop renewable energy, once again issued a big move and issued the "Notice on the Relevant Requirements for Establishing the Quota Assessment System for Non-hydro Renewable Energy Power Generation of Coal-fired Thermal Power Units", which clearly stated that in 2020, all coal-fired power plants will The ratio of non-hydro renewable energy power generation quotas undertaken by coal power generation enterprises to thermal power generation should be more than 15%. This requirement has two flaws: First, the whip hits the supply side, which can indeed promote the increase of renewable energy power generation capacity and the improvement of power generation capacity, but what if it cannot be absorbed? I can only go to the power grid company again. This kind of method of treating the head and the foot is often thankless. Second, the requirement is placed on the existing thermal power companies. Regardless of the thermal power companies’ technical and comparative advantages in the thermal power field, it is better to let those companies with technical advantages in renewable energy power generation bear the burden of renewable energy development through market means. important task. An effective measure to achieve this is to establish a viable renewable energy green power certificate (called "tradable renewable energy credit vouchers" in the United States, TradableRenewableEnergyCredits) trading system.
In the process of formulating policies targeting the demand side, it is worth emphasizing that the renewable energy quota system legislation usually stipulates specific quota requirements (proportion or quantity), but it does not mean that the higher the quota is, the stronger the policy will be. The policy strength generated by the quota system will also be affected by many factors, such as policy coverage, in some states in the United States, such as Maryland, Iowa, Texas, Hawaii, Minnesota and Wisconsin, etc. , all electricity sales companies are subject to legislation; but in Montana, the quota system is only for electricity sales companies established by private capital, and about 55% of the electricity market is not subject to this system. The smaller the policy coverage, the smaller the policy force. Another example is the treatment of existing renewable energy installed capacity. In some states in the United States, such as Arizona, Massachusetts, Montana and Vermont, only the new installed capacity after the establishment of the quota system can be used to meet Quota requirements, but in most states, existing installed capacity when the quota system was established can also be used to meet quota requirements. Under the same quota indicators, limiting new installed capacity can only be used to meet the quota requirements, which will undoubtedly effectively improve the policy. These foreign experiences remind Chinese policy makers that development goals are important, but when formulating policies, they must consider many design elements that may affect the strength of the policy.
Green certificate trading should be a game of chess across the country
RPS is a market-oriented system rather than a planning-oriented system. Therefore, another important design element of the renewable energy quota system is the renewable energy green power certificate trading system. All electricity produced by renewable energy power generation companies will be issued a green certificate, which can be freely traded in the market. In this way, the power purchaser can have multiple ways to meet the quota requirements: it can directly purchase electricity from renewable energy power generation companies; when there are problems in power transmission, it can completely purchase green certificates from renewable energy power generation companies , to meet quota requirements. This system allows renewable energy power to have two commodity attributes, one is normal electricity, which is sold in the market like thermal power; the other is a green certificate that characterizes its ecological attributes, and can also be sold through the market to obtain income. Under the requirements of renewable energy quotas, power purchasers have the incentive to purchase green certificates, because the fines they face if they fail to meet the quotas required by regulations are usually several times the price of green certificates in the market. With fines as a "big stick", an active green certificate trading market can be formed.
The renewable energy quota system without the green certificate trading market can only be a reprint of the traditional planned economy thinking. Through orders and coercive means, power generation companies and power purchasers are forced to develop a certain proportion of renewable energy. This will inevitably give enterprises Bringing huge pressure on rising costs. The purpose of the design of the green certificate transaction system is to minimize the cost through the market transaction mechanism on the premise of determining the realization of the total amount of renewable energy development goals. Through market transactions, in terms of renewable energy development, thermal power companies without advantages do not need to develop wind power and solar power at all, but renewable energy power generation companies with technological advantages will undertake this task.
In the United States, basically all states have established green certificate trading systems, but in a considerable number of states, green certificates only allow intra-state transactions. Policy makers believe that allowing cross-state transactions will reduce the impact of the quota system on the development of renewable energy in the state enhancement. Although restricting out-of-state transactions can protect local interests, it is not conducive to reducing the cost of renewable energy power generation as a whole, which violates the original intention of the system design. China's central government has greater authority, and it is easier to break away from this kind of local protectionism and establish a unified national green certificate trading market. Currently, the China Green Electricity Certificate Subscription Trading Platform, which undertakes the voluntary subscription transaction task of national green certificates, has achieved good results. At the beginning, we should avoid fragmentation of this unified market in the future.
As a responsible major country, China has made a solemn commitment to the international community to reduce carbon emissions and develop renewable energy. When formulating relevant policies, we need to be cautious. How to achieve the greatest policy effect with the smallest cost, and how to balance the relationship between economic costs and environmental protection require policy makers to always maintain a clear and rational policy formulation thinking.