Research On Carbon Emission Reduction Cost Of The Power Industry Of China Based On Resource Allocation Optimization

The core to mitigate global climate change is to reduce the greenhouse gases(Green House Gas) emissions caused by human activities, mainly the carbon dioxideemissions(carbon emissions) from fossil fuel consumption. The fossil energyconsumption is coal-based and approximately half of them are used for powergeneration in China. Coal fired power amounts to more than80%of the totalelectricity consumption in China, Therefore, it is the most important to control GHGemissions from coal-fired power generation industry. This research is useful forestimating the overall mitigation cost and reasonable reduction target of China. Thisdissertation carry out the following research surrounding the issues of carbonabatement cost and strategies. A LCA (life cycle assessment) model was built forcoal-fired power station and two shadow price calculation models were built to assessthe carbon emission cost of power plant. The carbon emission potential and factorsinfluence the carbon emission cost of power plant were also analyzed in this research.The first chapter introduces the background, the goal and the importance of thisresearch. Based on the current existing research, chapter one put forwards the researchmethodology of the whole dissertation. The second chapter analyzes partialequilibrium theory and general equilibrium theory, based on the above analysis, thischapter also differentiate the relationship of carbon emission shadow price, carbonreduction cost and carbon abetment marginal cost. At last, this chapter proved thefeasibility and rationality of shadow price estimation through the method of frontierproduction function and mathematical programming. The third chapter constructs acarbon intensity model of the power plant based on life cycle assessment method. Themodel is applied to the Shenzhen energy Corporation and it is the basic tool for theanalysis below. In order to realize the energy saving target, carbon emission becomes anecessary factors of production when there is a cap for carbon emission, more andmore high carbon intensity power plant would face carbon emission constraint.Chapter four and five estimate carbon emission shadow price of power plant andpower industry accordingly, and then calculate the cost of carbon emission. The fourthchapter constructs a frontier production model to obtain the plant level carbonemission shadow price. The frontier production model improves the traditionalproduction function to multi-output model and derives the expression of shadow pricebased on the duality property between cost function and profit function. It alsoanalyzes the carbon emission value and reduction potential and cost of power plant.The fifth chapter construct a power system cost optimization model include carbon emission constrain and analyze the carbon emission value of power system level. Thesixth chapter compares the similarities and differences of carbon tax and carbontrading mechanisms and then raising the supposition of optimizing the carbon emissionrights through a carbon market. The last chapter elaborates the basic institutionalarrangements of Shenzhen carbon trading market and analysis its function in thecarbon emission resource optimization.In recent years, due to the large number of new efficient turbines come intoproduction, China has ended the power supply shortage situation, which created theconditions for the implementation of structural carbon reduction of power sector.Shenzhen is a city with a population of over ten million and GDP over one trillion.Shenzhen electricity industry has very limited energy saving potential throughtechnological innovation and now actively promoting market mechanisms in the fieldof energy saving.If these energy-saving and emission reduction market-basedinstruments can procure electricity industry structure optimization and achieve thepurpose of structural carbon emissions, it will play an exemplary role in thedevelopment of low-carbon power industry in China. This is an example of thesignificance of this paper lies in Shenzhen. I had the honor to participate the firstcarbon market building in developing countries. As a participant in the system design,I have study the carbon reduction path of the power industry and the resultingreduction costs based on the optimal resource allocation.