Research On The Impact Of Carbon Price On China’s Power Structure Based On System Dynamics

The issue of greenhouse gas emissions has brought huge challenges to the sustainable development of human society.Countries around the world have actively introduced various policies to strive to achieve carbon emission reduction targets.As a very effective policy tool,carbon market has been widely used in the practice of carbon emission reduction in recent years.As the world’s largest carbon emitter,China has actively participated in the construction of the carbon market.Since China approved the pilot work of carbon emission trading in 2011,eight regional pilot carbon markets have been successively established in China.The National Carbon Market was officially launched in 2017,and the power generation industry,as the only industry included,has attracted much attention.The internal connection between carbon market and electricity market has become the focus of research.Researching on the relationship between carbon market and electricity market can not only enrich the theoretical research of China’s carbon market,but also provide reference for rationally designing carbon market mechanisms and promoting the optimization of China’s power supply structure.Therefore,the topic of this paper has important theoretical and practical significance.Based on the price transmssion mechanism of carbon market and electricity market,this paper analyzes the coupling mechanism of electricity market and carbon market.Using System Dynamics model and market equilibrium method,this paper studies the influence of carbon price fluctuation on China’s power supply structure,and discusses the reasonable range of carbon price,so as to promote the coordinated development of electricity market and carbon market.Firstly,this paper analyzes the carbon emission system and trading situation of China’s pilot carbon markets,as well as the carbon allowance allocation scheme of the National Carbon Market;Secondly,based on the main influencing factors of carbon price,the carbon price model is constructed;Thirdly,based on the theory of System Dynamics and market equilibrium,a two-market model of the influence of carbon prices on power supply structure is established.In addition,considering that renewable energy generation is an important part of the power supply structure,this paper builds a three-market model by adding green certificate market on the basis of the two-market model,and analyzes the variation trend of China’s on-grid price,power supply structure and profit of thermal power enterprises under the policy scenario of whether there is a carbon market;Finally,some policy suggestions and inspirations are put forward.The research results show that:Carbon market can effectively restrain the increase of thermal power installed capacity and power generation.Controlling carbon price within a reasonable range can play a significant role in promoting the optimization of power supply structure.Otherwise,it will affect the sustainable development of the power industry.The reasonable range of carbon price in China is 15-64.5 yuan/ton.Carbon market has indirectly increased the capacity of new renewable energy installations,partly by affecting power supply.Green certificate price and carbon price together act on the electricity market,effectively improving China’s power structure,promoting the development of renewable energy,and promoting the process of carbon emission reduction in the power industry.The novelty of this paper is mainly reflected in two aspects:First,in terms of research content,existing literature lacks research on the relationship between China’s carbon market and electricity market.This paper studies the impact of carbon price on China’s power structure,which makes up for the deficiency of existing literature;Second,in terms of research method,the current research methods on the relationship between carbon market and electricity market mainly include general equilibrium method and game theory-based method.In this paper,System Dynamics model is used.In addition,considering the important role of green certificate market on the power supply structure,the green certificate price is introduced into the model.