Low-carbon technology diffusion in the decarbonization of the power sector: policy implications

Abstract

The Chinese power sector faces a significant challenge in attempting to mitigate its CO₂ emissions while meeting its fast-growing demand for electricity. To address this challenge, an analytical framework is proposed that incorporates technological learning curves in a technology optimization model. The framework is employed to evaluate the technology trajectories, resource utilization and economic impacts in the power sector of Tianjin in 2005–2050. Using multi-scenario analysis, this study reveals that CO₂ emissions could be significantly reduced if relevant mitigation policies are introduced. The main technologies adopted are ultra-super-critical combustion, integrated gasification combined cycle, wind power, hydropower, biomass power, solar photovoltaic power and solar thermal power. Despite uncertainties, nuclear power and CO₂ capture and storage technology could be cost competitive in the future. The CO₂ emissions cap policy has the advantage of realizing an explicit goal in the target year, while the renewable energy policy contributes to more cumulative CO₂ emissions reduction and coal savings. A carbon tax of 320 CNY/ton CO₂ would contribute to early renewable energy development and more CO₂ reduction in the short run. A sensitivity analysis is conducted to examine the impacts on the power system of learning rates, technology cost reductions and energy fuel price trajectories.