Analysis of the market penetration of clean coal technologies and its impacts in Chinaʹs electricity sector

This paper discusses policy instruments for promoting the market penetration of clean coal technologies (CCTs) into Chinaʹs electricity sector and the evaluation of corresponding effects. Based on the reality that coal will remain the predominant fuel to generate electricity and conventional pulverized coal boiler power plants have serious impacts on environment degradation, development of clean coal technologies could be one alternative to meet Chinaʹs fast growing demand of electricity as well as protect the already fragile environment. A multi-period market equilibrium model is applied and an electricity model of China is established to forecast changes in the electricity system up to 2030s. Three policy instruments: SO2 emission charge, CO2 emission charge and implementing subsidies are considered in this research. The results show that all instruments cause a significant shift in Chinaʹs electricity structure, promote CCTs’ competitiveness and lead China to gain great benefit in both resource saving and environment improvement. Since resource security and environment degradation are becoming primary concerns in China, policies that could help to gain generations’ market share of advanced coal-based technologies such as CCTs’ is suitable for the current situation of Chinaʹs electricity sector.