Research On The Power Industry Development And Government Subsidy Mechanism For Renewable Energy

Renewable energy development is one of the most important measures to deal with global climate change.More than 140 countries have implemented subsidy policies on renewable energy industry.Basically,it has formed a sustainable development support system for renewable energy industry which is based on subsidy policy and various regulations.But as the industry has grown,so has some hidden problems(For example,how should the subsidy be selected and the subsidy inefficient and so on).Based on this,this paper starts from the perspective of energy substitution,using game theory and the theory of industrial organization model,focus on direct subsidies for renewable energy,studies the internal perfect optimization and external comparison selection of subsidy policy,and the following are the main conclusions:First,according to the social reality,this paper defines a generalized social welfare function that contains traditional energy negative externalities,in the context of the maximization of social welfare in a broad sense,no matter how the social economic parameters change,the mixed subsidy can bring the highest social welfare level.When the negative externality coefficient of the environment is small,that is to say,when the governments attaches great importance to environmental protection,the mix subsidies,while increasing the level of production of renewable energy,would also bring in higher energy prices than other two kinds of subsidy.When the government aims is to promote the development of renewable energy and the pollution caused by the production of traditional energy enterprises is small,mix subsidies are the best way.At this time,under the mix subsidy,not only the renewable energy enterprises have higher production level,but the level of social welfare can also be relatively higher.When the negative externality of traditional energy coefficient is high,under the mix subsidy,despite the social welfare level is higher than other two kinds of subsidy;the production level of renewable energy enterprises is lower.Second,only when the investment period of renewable energy projects reached a certain length,the government would have the incentive to give enterprises a one-time subsidy,and there is a positive correlation between the amount of subsidy and the length of investment period.Usually,the investment cycle of water conservancy investment is longer,high upfront investment costs cannot be recovered in a short time;therefore,it is necessary for the government to subsidize the project with a longer investment period.For projects with less investment,enterprises can obtain funds by other means,and the government does not need to subsidize.Thirdly,under the complete information market,the optimum yield of higher cost renewable energy enterprises is greater than lower cost renewable energy enterprises,the corresponding cost increase will lead to a higher market price,and the optimal subsidy provided by the government also increases with the increase of production costs.In the market of incomplete information,due to unable to screen the cost information of renewable energy companies,subsidies cannot be targeted,government can only give a subsidy about the probability of its cost,subsidies at this time are increasing with the increase of the probability of higher costs for renewable energy companies,and under complete information,the optimal subsidy is between the optimal subsidy given at different cost levels.What's more,when the subsidy difference between renewable energy companies with different costs is more than the cost difference,enterprises will lie about the cost to defraud government subsidies which is bound to cause the change of the optimal state of the society,also affects the government's inability to provide targeted subsidies.Finally,to promote the development of green credit,the government should adopt different green interest rate policies at different market rates,reduce the negative impact of other factors on green credit and promote healthy development of green credit.Whether the government target is the producer surplus maximization or the green GDP maximization,it is beneficial for the scale of production of renewable energy companies to offer a discount rate below the market rate.Because of the environmental damage caused by traditional energy,compares to the government with producer surplus orientation,when considers the negative externalities of traditional energy companies,government can provide renewable energy companies with larger production funds.Moreover,the greater the negative externalities of traditional energy sources,the smaller the share of traditional energy in the capital allocation market.Furthermore,this paper considers the impact of carbon tax,the analysis shows that the government can increase the amount of capital of renewable energy enterprises by imposing carbon tax on traditional energy enterprises,and the amount of capital held by renewable energy enterprises is positively related to the carbon tax level.