Study Of The Long-term Low-carbon Transition In China’s Power Sector:Based On Enterprise Behavior Simulation

As the largest carbon emitter,power sector’s low-carbon transition is an important part of China’s low-carbon development.Thus the study on the low-carbon transition path of China’s power sector under low-carbon policies has important scientific and policy implications for China’s low-carbon development forecast and low-carbon policy assessment.Based on current status of China’s power sector,study on its low-carbon transition should consider two important factors: on one hand,with the deepening of power market reform,power sector’s long-term transition relies increasingly on the decentralized investment behavior of power enterprises;on the other hand,the power industry faces many uncertainties from nature resource and economy development during its transition process.Comprehensive considerations of these two factors haven’t been found in previous studies.The purpose of this study is to explore the long-term low-carbon transition path and its uncertainty in China’s power sector,based on the simulation of power enterprises’ behaviors.To this end,this study combines a multi-agent-based model,utility theories and Monte Carlo simulation,to construct a MABUM model(Multi-agent-based Model incorporated with uncertain modelling)for China’s power sector.Based on this MABUM model,this study first analyzes the impacts of enterprise behaviors on power sector’s lowcarbon transition by comparing different enterprise preference scenarios;then analyzes the long-term low-carbon transition paths and their uncertainties of China’s power sector under low-carbon policies by considering both enterprise behaviors and many uncertainties.It is found in this study that both enterprises’ preferences and low-carbon policy design have important influence on the low-carbon transition and its uncertainty of China’s power sector.(1)Power enterprises’ risk aversion and adaptive technical preference help promote low-carbon development in power sector with potential synergetic effects,but they also bring economic losses and higher subsidy burden.So power enterprises’ preferences should be considered in study of power sector’s low-carbon transition.(2)As for its low-carbon transition path,it is found that power sector will witness peaking of fossil energy and an outbreak of non-fossil energy development around 2030,but fossil energy won’t be completely replaced before 2050.The paid allocation mechanism of China’s carbon emission trading scheme(ETS)can promote an earlier and larger-scale low-carbon transition than grandfathering mechanism: peaking time of power sector’s carbon emission come 7-8 years earlier with a peak reduction of 17.4%.The initial carbon price and its volatility will promote and curb low-carbon transition in power sector respectively,with significant effects on solar and wind energy.(3)As for uncertainty of its low-carbon transition path,China’s carbon ETS has both policy effect and price effect on the uncertainty of power sector’s low-carbon transition,and overall it can weaken the uncertainty of this transition.Considering different allocation mechanisms of carbon ETS,the paid allocation mechanism can bring stronger policy effect and thus a more stable low-carbon transition.Under paid allocation mechanism,the probability that the power industry will reach its peak carbon emissions by 2030 reaches 71-97%,and the peak uncertainty will shrink by 60-76% compared with unpaid allocation mechanism.Under paid allocation mechanism,although China’s power sector still cannot meet the requirements of the NDC target,it has the probability to achieve the 2°C control target.Also,carbon prices’ volatility can intensify uncertainty of power sector’s low-carbon transition,especially under paid allocation mechanism.(4)As for carbon reduction costs of its low-carbon transition,power sector will bear carbon reduction costs in early stage of transition,but harvest large carbon reduction benefits in the long term,and consumers will benefit the most.The paid allocation mechanism of carbon ETS can achieve earlier,higher,and more stable long-term carbon reduction benefits,reaching 0.5% of GDP in 2050,while carbon prices’ volatility has the opposite impacts.