“Economic and Environmental Benefits of Transition to Electricity Market in China, Provincial Versus Regional Grid Optimization” Seminar

Presenter: Jiang Lin, Lawrence Berkeley National Laboratory

Wednesday, August 28, 2019
Morgan Lounge (1st floor of Morgan Hall), UC Berkeley

All Seminars are open to the public. No registration is required; please arrive on time in order to find seating.


China, whose power system accounts for about 13% of global energy-related CO2 emissions, has begun implementing market-based power-sector reforms. This paper simulates power system dispatch in China’s Southern Grid region and examines the economic and environmental impacts of market-based operations. We find that market-based operation can increase efficiency and reduce costs in all Southern Grid provinces—reducing wholesale electricity costs by up to 35% for the entire region relative to the 2016 baseline. About 60% of the potential cost reduction can be realized by creating independent provincial markets within the region, and the rest by creating a regional market without transmission expansion. The wholesale market revenue is adequate to recover generator fixed costs; however, financial restructuring of current payment mechanisms may be necessary. Electricity markets could also reduce the Southern Grid’s CO2 emissions by up to 10% owing to more efficient thermal dispatch and avoided hydro/renewable curtailment. The benefits of regional electricity markets with expanded transmission likely will increase as China’s renewable generation increases.

Jiang Lin’s bio can be found here.