Study On The Economic Competitiveness Of Natural Gas-fired Electricity In China Under Energy Market Reform Using Dynamic Game-theoretic Model

Natural gas-fired electricity(NGFE)has gained more and more attention in China recently because of its cleanness and high efficiency.However,the high generation cost leads to the situation that NGFE cannot compete economically with the coal-fired electricity(CFE).The units of NGFE are suitable for peak-shaving because of shorter start-up times and quick response to the demand of end-users.Moreover,compared to CFE,NGFE only produces half of the CO2 emissions.However,the value of peak power and positive environmental externality of NGEF are not considered in natural gas pricing in China,and thus support policies are needed.In order to define the effect of tax or subsidy policies on NGFE's economic competitiveness quantitatively under the market deregulation both for natural gas market and electricity market,a dynamic game-theoretic model of the natural gas and NGFE market is developed in this research.This paper(1)reviews the current foreign and domestic research situation including market reform of NGFE,game-theoretic model in energy field and the impact of related policies on the economic competitiveness of NGFE,(2)discusses the current situations of NGFE in several countries and regions,depicts the effect of carbon tax,environmental subsidy and introduces market deregulation on increasing the consumption of NGFE and the pricing mechanisms of natural gas and electricity,(3)illustrates the theoretical basis of this research and discusses the model assumptions,the game-theoretic model of Chinese NGFE market and the model solutions,(4)designs five scenarios to measure the influence of carbon tax,environmental subsidy and market deregulation quantitatively on the economic competitiveness of NGFE and performs sensitivity analysis;calculates the economic competitiveness of NGFE under five scenarios and the role of different policies is concluded.Detailedly,it can be concluded that 1)Deregulating the NG price,imposing carbon tax and adopting environment subsidy can promote the market penetration of NGFE greatly,and 2)the market deregulation can increase the share of NGFE to 5.49%,and imposing the carbon tax of 100 RMB/tonne CO2 can raise it further to 7.66%,furthermore if the environmental subsidy of 134.3 RMB/MWh is also included,the share of NGFE can reach 15%.(5)Based on the above analysis,it has been concluded that the NGFE is economically competitive under the relative pricing mechanisms and related policies;prospects of future works are proposed.