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Jiahai Yuan - One of the best experts on this subject based on the ideXlab platform.
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Wind Power integration and emission reduction via Coal Power retrofits in China’s quota-based dispatch system: a case study of Jilin Province
Environmental science and pollution research international, 2020Co-Authors: Mengjia Ren, Xu Jiang, Jiahai YuanAbstract:As China expands the renewable share in its Power system, Coal Power is regulated to balance load by adjusting output to meet system demand at all times. In 2016, the Chinese government required existing Coal fleets to conduct flexibility retrofits to accommodate more renewable Power. We conduct this study to evaluate how Coal Power retrofits could affect wind integration and emissions at a system level. By constructing a balancing model that respects China’s unique quota-based dispatch rules, we use real data from provincial dispatch center of Jilin Province to compare wind Power integration and system emissions before and after Coal Power retrofits. We find that Coal Power retrofits can significantly reduce wind curtailment from 31 to 7% in our base simulation model. However, emission reductions achieved from Coal Power retrofits are subject to diminishing marginal returns. We suggest policy efforts to proceed with the strategy of Coal Power retrofits but carefully evaluate both economic and environmental costs associated with different technologies to reduce pollution and implement from the least expensive ones.
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Environmental Stress Testing for China’s Overseas Coal Power Investment Project
Sustainability, 2019Co-Authors: Minpeng Xiong, Xiaowen Yang, Sisi Chen, Fulian Shi, Jiahai YuanAbstract:The advance of the Chinese “Belt and Road” initiative encourages increased overseas investment in Coal Power projects. However, it also brings about external environmental risks. In this paper, we use the approach of environmental stress testing to examine China’s overseas Coal Power investment projects by focusing on two countries: Indonesia and Vietnam. We first identify five key testing factors (i.e., Coal price, utilization hours, exchange rate, carbon tax, and environmental protection requirements) by examining the market regulation and the environmental risks of Coal Power projects along the “Belt and Road” countries. Then, we observed changes in the enterprise value and internal rate of return (IRR) by setting different scenarios in which the values of the five stress factors varied. The results show that (1) the economics of Coal-fired projects in Indonesia is most sensitive to exchange rate, while the economics of Coal projects in Vietnam is most sensitive to Coal price; (2) the pressure of nationally determined contributions (NDC) goals on environmental protection will push the “Belt and Road” countries to implement more stringent environmental regulation, which will reinforce environmental stress on overseas Coal Power investment. These results have important policy implications for the enterprise, industry, and Chinese government.
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The Flexible Operation of Coal Power and Its Renewable Integration Potential in China
Sustainability, 2019Co-Authors: Huan Pan, Jiahai Yuan, Yuhong Zhu, Lixia DingAbstract:At present time, China’s Power systems face significant challenges in integrating large-scale renewable energy and reducing the curtailed renewable energy. In order to avoid the curtailment of renewable energy, the Power systems need significant flexibility requirements in China. In regions where Coal is still heavily relied upon for generating electricity, the flexible operations of Coal Power units will be the most feasible option to face these challenges. The study first focused on the reasons why the flexible operation of existing Coal Power units would potentially promote the integration of renewable energy in China and then reviewed the impacts on the performance levels of the units. A simple flexibility operation model was constructed to estimate the integration potential with the existing Coal Power units under several different scenarios. This study’s simulation results revealed that the existing retrofitted Coal Power units could provide flexibility in the promotion of the integration of renewable energy in a certain extent. However, the integration potential increment of 20% of the rated Power for the Coal Power units was found to be lower than that of 30% of the rated Power. Therefore, by considering the performance impacts of the Coal Power units with low performances in load operations, it was considered to not be economical for those units to operate at lower than 30% of the rated Power. It was believed that once the capacity share of the renewable energy had achieved a continuously growing trend, the existing Coal Power units would fail to meet the flexibility requirements. Therefore, it was recommended in this study that other flexible resources should be deployed in the Power systems for the purpose of reducing the curtailment of renewable energy. Furthermore, based on this study’s obtained evidence, in order to realize a Power system with high proportions of renewable energy, China should strive to establish a Power system with adequate flexible resources in the future.
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Why Has China Overinvested in Coal Power
2019Co-Authors: Mengjia Ren, Lee Branstetter, Brian K. Kovak, Daniel Erian Armanios, Jiahai YuanAbstract:Since 2005, the Chinese government has engaged in an ambitious effort to move China’s energy system away from Coal and towards more environmentally friendly sources of energy. However, China’s investment in Coal Power has accelerated sharply in recent years, raising concerns of massive overcapacity and undermining the central policy goal of promoting cleaner energy. In this paper, we ask why China engaged in such a pronounced investment boom in Coal Power in the mid-2010s. We find the protective rules under which China’s Coal Power industry has historically operated have made excessive investment extremely likely unless the central government serves as a “gatekeeper,” slowing and limiting investment in the face of incentives for socially excessive entry. When Coal-Power project approval authority was decentralized from the central government to local governments at the end of 2014, the gate was lifted and approval time considerably shortened, allowing investment to flood into the market. We construct a simple economic model that elucidates the effects of key policies on Coal Power investment, and examine the model’s predictions using Coal-Power project approval records from 2013 to 2016. We find the approval rate of Coal Power is about 3 times higher when the approval authority is decentralized, and provinces with larger Coal industries tend to approve more Coal Power. We estimate that local Coal production accounts for an additional 54GW of approved Coal Power in 2015 (other things equal), which is about 1/4 of total approved capacity in that year.
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Coal Power Environmental Stress Testing in China
Sustainability, 2018Co-Authors: Jiahai Yuan, Weirong Zhang, Yu Guo, Minpeng XiongAbstract:The development of China’s Coal Power industry is accompanied by various environmental risks. In this paper, typical Coal Power enterprises are taken as examples to establish a tool for environmental cost internalization and environmental risk analysis under the risk constraints of energy efficiency standards, environmental protection tax, national carbon market, water resources tax, overcapacity and renewable energy substitution. The study considered the impact on the value of Coal Power companies under different stress scenarios and constructed a stress testing framework for environmental risks that affect financial costs. The results show that the impacts of overcapacity and carbon market on enterprise value for individual risks are the main risk drivers that most regions face in different scenarios. In the comprehensive risk stress test, the enterprise value of the 1000 MW ultra-supercritical units in each region was found to have a small difference from the corporate value of the reasonable return in the optimistic and pessimistic scenarios, while the 300 MW and 600 MW sub critical units were more likely to deviate from the reasonable return due to low energy efficiency and high operating costs. With continuous increase in the severity of environmental risks, the environmental stress test helps Coal Power companies and financial institutions understand the impact of environmental risks on the financial status of the company and thus influence investment decisions.
Minpeng Xiong - One of the best experts on this subject based on the ideXlab platform.
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Environmental Stress Testing for China’s Overseas Coal Power Investment Project
Sustainability, 2019Co-Authors: Minpeng Xiong, Xiaowen Yang, Sisi Chen, Fulian Shi, Jiahai YuanAbstract:The advance of the Chinese “Belt and Road” initiative encourages increased overseas investment in Coal Power projects. However, it also brings about external environmental risks. In this paper, we use the approach of environmental stress testing to examine China’s overseas Coal Power investment projects by focusing on two countries: Indonesia and Vietnam. We first identify five key testing factors (i.e., Coal price, utilization hours, exchange rate, carbon tax, and environmental protection requirements) by examining the market regulation and the environmental risks of Coal Power projects along the “Belt and Road” countries. Then, we observed changes in the enterprise value and internal rate of return (IRR) by setting different scenarios in which the values of the five stress factors varied. The results show that (1) the economics of Coal-fired projects in Indonesia is most sensitive to exchange rate, while the economics of Coal projects in Vietnam is most sensitive to Coal price; (2) the pressure of nationally determined contributions (NDC) goals on environmental protection will push the “Belt and Road” countries to implement more stringent environmental regulation, which will reinforce environmental stress on overseas Coal Power investment. These results have important policy implications for the enterprise, industry, and Chinese government.
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Coal Power Environmental Stress Testing in China
Sustainability, 2018Co-Authors: Jiahai Yuan, Weirong Zhang, Yu Guo, Minpeng XiongAbstract:The development of China’s Coal Power industry is accompanied by various environmental risks. In this paper, typical Coal Power enterprises are taken as examples to establish a tool for environmental cost internalization and environmental risk analysis under the risk constraints of energy efficiency standards, environmental protection tax, national carbon market, water resources tax, overcapacity and renewable energy substitution. The study considered the impact on the value of Coal Power companies under different stress scenarios and constructed a stress testing framework for environmental risks that affect financial costs. The results show that the impacts of overcapacity and carbon market on enterprise value for individual risks are the main risk drivers that most regions face in different scenarios. In the comprehensive risk stress test, the enterprise value of the 1000 MW ultra-supercritical units in each region was found to have a small difference from the corporate value of the reasonable return in the optimistic and pessimistic scenarios, while the 300 MW and 600 MW sub critical units were more likely to deviate from the reasonable return due to low energy efficiency and high operating costs. With continuous increase in the severity of environmental risks, the environmental stress test helps Coal Power companies and financial institutions understand the impact of environmental risks on the financial status of the company and thus influence investment decisions.
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The economics of Coal Power generation in China
Energy Policy, 2017Co-Authors: Changhong Zhao, Weirong Zhang, Yang Wang, Qilin Liu, Jingsheng Guo, Minpeng Xiong, Jiahai YuanAbstract:The Chinese government recently released the 13th FYP (five-year plan) Power development plan and proposed a capacity installation target of 1100GW for Coal Power. Considering the weak demand growth of Coal Power since 2014, continuous decline in the annual utilisation hour and the coming market competition, such a planning target is unwelcome and could further the economic deterioration of Coal Power. In this paper, we employ LCOE (levelised cost of electricity) and project evaluation models to conduct a nationwide survey on the economics of Coal Power. The economic analysis has clearly indicated that the recent boom of Coal Power investment in China, which is absurd in many perspectives, is largely the aftermath of uncompleted market reform in the Power sector. However, the fundamentals of electricity demand and supply are changing at a speed beyond the imagination of Power generators and have foreboded a gloomy prospect for Coal Power. Our study shows that by 2020, with several exceptions, in most provinces the internal rate of return for Coal Power will drop below the social average return rate or will even be negative. In this regard, the 13th FYP capacity planning target for Coal Power is economically untenable and requires radical revision.
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The prospective of Coal Power in China: Will it reach a plateau in the coming decade?
Energy Policy, 2016Co-Authors: Jiahai Yuan, Minpeng Xiong, Qi Lei, Jingsheng GuoAbstract:Coal Power holds the king position in China's generation mix and has resulted in ever-increasing ecological and environmental issues; hence, the development of the electric Power sector is confronted with a series of new challenges. China has recently adopted a new economic principle of the “new economic normal,” which has a large effect on the projection electricity demand and Power generation planning through 2020. This paper measures electricity demand based upon China's social and economic structure. The 2020 roadmap presents China's developing targets for allocating energy resources to meet new demands, and the 2030 roadmap is compiled based upon an ambitious expansion of clean energy sources. Results show that electricity demand is expected to reach 7500TWh in 2020 and 9730TWh in 2030. Coal Power is expected to reach its peak in 2020 at around 970GW, and will then enter a plateau, even with a pathway of active electricity substitution in place.
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scenario based analysis on water resources implication of Coal Power in western china
Sustainability, 2014Co-Authors: Jiahai Yuan, Minpeng Xiong, Changhong ZhaoAbstract:Currently, 58% of Coal-fired Power generation capacity is located in eastern China, where the demand for electricity is strong. Serious air pollution in China, in eastern regions in particular, has compelled the Chinese government to impose a ban on the new construction of pulverized Coal Power plants in eastern regions. Meanwhile, rapid economic growth is thirsty for electric Power supply. As a response, China planned to build large-scale Coal Power bases in six western provinces, including Inner Mongolia, Shanxi, Shaanxi, Xinjiang, Ningxia and Gansu. In this paper, the water resource implication of the Coal Power base planning is addressed. We find that, in a business-as-usual (BAU) scenario, water consumption for Coal Power generation in these six provinces will increase from 1130 million m 3 in 2012 to 2085 million m 3 in 2020, experiencing nearly a double growth. Such a surge will exert great pressure on water supply and lead to serious water crisis in these already water-starved regions. A strong implication is that the Chinese Government must add water resource constraint as a critical point in its overall sustainable development plan, in addition to energy supply and environment protection. An integrated energy-water resource plan with regionalized environmental carrying capacity as constraints should be developed to settle this puzzle. Several measures are proposed to cope with it, including downsizing Coal Power in western regions, raising the technical threshold of new Coal Power plants and implementing retrofitting to the inefficient cooling system, and reengineering the generation process to waterless or recycled means.
Zhongnan Zhao - One of the best experts on this subject based on the ideXlab platform.
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Managing Scarce Water Resources in China’s Coal Power Industry
Environmental management, 2016Co-Authors: Chao Zhang, Lijin Zhong, Zhongnan ZhaoAbstract:Coal Power generation capacity is expanding rapidly in the arid northwest regions in China. Its impact on water resources is attracting growing concerns from policy-makers, researchers, as well as mass media. This paper briefly describes the situation of electricity-water conflict in China and provides a comprehensive review on a variety of water resources management policies in China's Coal Power industry. These policies range from mandatory regulations to incentive-based instruments, covering water withdrawal standards, technological requirements on water saving, unconventional water resources utilization (such as reclaimed municipal wastewater, seawater, and mine water), water resources fee, and water permit transfer. Implementing these policies jointly is of crucial importance for alleviating the water stress from the expanding Coal Power industry in China.
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managing scarce water resources in china s Coal Power industry
Environmental Management, 2016Co-Authors: Chao Zhang, Lijin Zhong, Xiaotian Fu, Zhongnan ZhaoAbstract:Coal Power generation capacity is expanding rapidly in the arid northwest regions in China. Its impact on water resources is attracting growing concerns from policy-makers, researchers, as well as mass media. This paper briefly describes the situation of electricity-water conflict in China and provides a comprehensive review on a variety of water resources management policies in China’s Coal Power industry. These policies range from mandatory regulations to incentive-based instruments, covering water withdrawal standards, technological requirements on water saving, unconventional water resources utilization (such as reclaimed municipal wastewater, seawater, and mine water), water resources fee, and water permit transfer. Implementing these policies jointly is of crucial importance for alleviating the water stress from the expanding Coal Power industry in China.
Changhong Zhao - One of the best experts on this subject based on the ideXlab platform.
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The economics of Coal Power generation in China
Energy Policy, 2017Co-Authors: Changhong Zhao, Weirong Zhang, Yang Wang, Qilin Liu, Jingsheng Guo, Minpeng Xiong, Jiahai YuanAbstract:The Chinese government recently released the 13th FYP (five-year plan) Power development plan and proposed a capacity installation target of 1100GW for Coal Power. Considering the weak demand growth of Coal Power since 2014, continuous decline in the annual utilisation hour and the coming market competition, such a planning target is unwelcome and could further the economic deterioration of Coal Power. In this paper, we employ LCOE (levelised cost of electricity) and project evaluation models to conduct a nationwide survey on the economics of Coal Power. The economic analysis has clearly indicated that the recent boom of Coal Power investment in China, which is absurd in many perspectives, is largely the aftermath of uncompleted market reform in the Power sector. However, the fundamentals of electricity demand and supply are changing at a speed beyond the imagination of Power generators and have foreboded a gloomy prospect for Coal Power. Our study shows that by 2020, with several exceptions, in most provinces the internal rate of return for Coal Power will drop below the social average return rate or will even be negative. In this regard, the 13th FYP capacity planning target for Coal Power is economically untenable and requires radical revision.
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Will recent boom in Coal Power lead to a bust in China? A micro-economic analysis
Energy Policy, 2017Co-Authors: Jiahai Yuan, Changhong Zhao, Weirong Zhang, Yang Wang, Qian Liu, Xinyi Shen, Kai Zhang, Liansai DongAbstract:Abstract In this paper, by adopting the levelized cost of electricity model and the financial appraisal method, we provide an economic interpretation for China's recent Coal Power bubble under weak demand growth. The study surveys the economics of a typical 600 MW newly-built pure condensing Coal-fired Power plant in six case provinces (Shanxi, Inner Mongolia, Xinjiang, Hebei, Jiangsu and Guangdong), where the profitability margins of Coal Power are above national average by the end of 2015. Results indicate that the continuous falling in Coal prices have lowered the generation costs but there has been insufficient adjustment to the benchmark on-grid tariff, enabling Coal Power to obtain unprecedented excess profits. Such excess profits have spurred the investment and caused local government to over-rely on Coal Power under economic downturn. However, in the context of cost escalation by deteriorated operation efficiency, higher environmental and climate change compliance costs and fierce market competition, the profitability of Coal Power will dissipate soon. Integrated Power capacity plan consistent with the new economic normal, stringent control on the scale of new Coal Power projects and deep Power market reform are the key policy implications of our analysis.
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scenario based analysis on water resources implication of Coal Power in western china
Sustainability, 2014Co-Authors: Jiahai Yuan, Minpeng Xiong, Changhong ZhaoAbstract:Currently, 58% of Coal-fired Power generation capacity is located in eastern China, where the demand for electricity is strong. Serious air pollution in China, in eastern regions in particular, has compelled the Chinese government to impose a ban on the new construction of pulverized Coal Power plants in eastern regions. Meanwhile, rapid economic growth is thirsty for electric Power supply. As a response, China planned to build large-scale Coal Power bases in six western provinces, including Inner Mongolia, Shanxi, Shaanxi, Xinjiang, Ningxia and Gansu. In this paper, the water resource implication of the Coal Power base planning is addressed. We find that, in a business-as-usual (BAU) scenario, water consumption for Coal Power generation in these six provinces will increase from 1130 million m 3 in 2012 to 2085 million m 3 in 2020, experiencing nearly a double growth. Such a surge will exert great pressure on water supply and lead to serious water crisis in these already water-starved regions. A strong implication is that the Chinese Government must add water resource constraint as a critical point in its overall sustainable development plan, in addition to energy supply and environment protection. An integrated energy-water resource plan with regionalized environmental carrying capacity as constraints should be developed to settle this puzzle. Several measures are proposed to cope with it, including downsizing Coal Power in western regions, raising the technical threshold of new Coal Power plants and implementing retrofitting to the inefficient cooling system, and reengineering the generation process to waterless or recycled means.
Chao Zhang - One of the best experts on this subject based on the ideXlab platform.
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Managing Scarce Water Resources in China’s Coal Power Industry
Environmental management, 2016Co-Authors: Chao Zhang, Lijin Zhong, Zhongnan ZhaoAbstract:Coal Power generation capacity is expanding rapidly in the arid northwest regions in China. Its impact on water resources is attracting growing concerns from policy-makers, researchers, as well as mass media. This paper briefly describes the situation of electricity-water conflict in China and provides a comprehensive review on a variety of water resources management policies in China's Coal Power industry. These policies range from mandatory regulations to incentive-based instruments, covering water withdrawal standards, technological requirements on water saving, unconventional water resources utilization (such as reclaimed municipal wastewater, seawater, and mine water), water resources fee, and water permit transfer. Implementing these policies jointly is of crucial importance for alleviating the water stress from the expanding Coal Power industry in China.
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managing scarce water resources in china s Coal Power industry
Environmental Management, 2016Co-Authors: Chao Zhang, Lijin Zhong, Xiaotian Fu, Zhongnan ZhaoAbstract:Coal Power generation capacity is expanding rapidly in the arid northwest regions in China. Its impact on water resources is attracting growing concerns from policy-makers, researchers, as well as mass media. This paper briefly describes the situation of electricity-water conflict in China and provides a comprehensive review on a variety of water resources management policies in China’s Coal Power industry. These policies range from mandatory regulations to incentive-based instruments, covering water withdrawal standards, technological requirements on water saving, unconventional water resources utilization (such as reclaimed municipal wastewater, seawater, and mine water), water resources fee, and water permit transfer. Implementing these policies jointly is of crucial importance for alleviating the water stress from the expanding Coal Power industry in China.