Renewable and Low-Carbon Electric Power and Grid Integration

Led by Michael McELROY (Chair, Harvard-China Project), LU Xi (Tsinghua School of Environment), and postdoc CHEN Xinyu (Harvard-China Project), Project researchers have explored the status and prospects for renewable and low carbon electric power in China, including the challenges of and solutions to integration of variable renewable sources into an inflexible, coal-dominated power system.

From assessing wind power potentials using meteorological data and the geophysical constraints, to exploring energy storage and other strategies to ease grid integration of variable power sources, this research has deepened understanding of the role that expanding renewable power capacities can play in reducing emissions of air pollutants and carbon dioxide in China.

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Acknowledgment: Some of the papers cited here are based on work supported by the National Science Foundation under Grants No. ATM-1019134 or ATM-0635548 (indicated by acknowledgments in the papers themselves). Any opinions, findings and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation (NSF).

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Xi Lu, Shi Chen, Chris P. Nielsen, Chongyu Zhang, Jiacong Li, Xu He, Ye Wu, Shuxiao Wang, Feng Song, Chu Wei, Kebin He, Michael P. McElroy, and Jiming Hao. 2021. “Combined solar power and storage as cost-competitive and grid-compatible supply for China’s future carbon-neutral electricity system.” Proceedings of the National Academy of Sciences, 118, October, Pp. 42. Publisher's Version Abstract

As the world’s largest CO₂ emitter, China’s ability to decarbonize its energy system strongly affects the prospect of achieving the 1.5 °C limit in global, average surface-temperature rise. Understanding technically feasible, cost-competitive, and grid-compatible solar photovoltaic (PV) power potentials spatiotemporally is critical for China’s future energy pathway. This study develops an integrated model to evaluate the spatiotemporal evolution of the technology-economic-grid PV potentials in China during 2020 to 2060 under the assumption of continued cost degression in line with the trends of the past decade. The model considers the spatialized technical constraints, up-to-date economic parameters, and dynamic hourly interactions with the power grid. In contrast to the PV production of 0.26 PWh in 2020, results suggest that China’s technical potential will increase from 99.2 PWh in 2020 to 146.1 PWh in 2060 along with technical advances, and the national average power price could decrease from 4.9 to 0.4 US cents/kWh during the same period. About 78.6% (79.7 PWh) of China’s technical potential will realize price parity to coal-fired power in 2021, with price parity achieved nationwide by 2023. The cost advantage of solar PV allows for coupling with storage to generate cost-competitive and grid-compatible electricity. The combined systems potentially could supply 7.2 PWh of grid-compatible electricity in 2060 to meet 43.2% of the country’s electricity demand at a price below 2.5 US cents/kWh. The findings highlight a crucial energy transition point, not only for China but for other countries, at which combined solar power and storage systems become a cheaper alternative to coal-fired electricity and a more grid-compatible option.

Lu et al. is the cover article of this October issue of PNAS
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Jing Cao, Mun S. Ho, Rong Ma, and Fei Teng. 2021. “When carbon emission trading meets a regulated industry: Evidence from the electricity sector of China.” Journal for Public Economics, 200, August, Pp. 104470. Publisher's Version Abstract

This paper provides retrospective firm-level evidence on the effectiveness of China’s carbon market pilots in reducing emissions in the electricity sector. We show that the carbon emission trading system (ETS) has no effect on changing coal efficiency of regulated coal- fired power plants. Although we find a significant reduction in coal consumption associated with ETS participation, this reduction was achieved by reducing electricity production. The output contraction in the treated plants is not due to their optimizing behavior but is likely driven by government decisions, because the impacts of emission permits on marginal costs are small relative to the controlled electricity prices and the reduction is associated with financial losses. In addition, we find no evidence of carbon leakage to other provinces, but a significant increase in the production of non-coal-fired power plants in the ETS regions.

Haiyang Lin, Qiuwei Wu, Xinyu Chen, Xi Yang, Xinyang Guo, Jiajun Lv, Tianguang Lu, Shaojie Song, and Michael B. McElroy. 2021. “Economic and technological feasibility of using power-to-hydrogen technology under higher wind penetration in China.” Renewable Energy, 173, Pp. 569-580. Publisher's Version Abstract

Hydrogen can play a key role in facilitating the transition to a future deeply decarbonized energy system and can help accommodate higher penetrations of renewables in the power system. Arguments to justify this conclusion are supported by an analysis based on real-world data from China’s Western Inner Mongolia (WIM). The economic feasibility and decarbonization potential of renewable-based hydrogen production are discussed through an integrated power-hydrogen-emission analytical framework. The framework combines a high-resolution wind resource analysis with hourly simulation for the operation of power systems and hydrogen production considering technical and economic specifications on selection of three different types of electrolyzers and two operating modes. The results indicate that using wind power to produce hydrogen could provide a cost-competitive alternative (<2 $kg-1) to WIM’s current coal-dominated hydrogen manufacturing system, contributing at the same time to important reductions in wind curtailment and CO2 emissions. The levelized cost for hydrogen production is projected to decrease in the coming decade consistent with increases in wind power capacity and decreases in capital costs for electrolyzers. Lessons learned from the study can be applied to other regions and countries to explore possibilities for larger scale economically justified and carbon saving hydrogen production with renewables.

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