Climate Change Research ›› 2023, Vol. 19 ›› Issue (3): 334-346.doi: 10.12006/j.issn.1673-1719.2022.181

• Greenhouse Gas Emissions • Previous Articles     Next Articles

Impact of carbon allowance allocation rules on the revenue of coal power sector

LIU Yuan-Xin1, LUO Xu1, ZHANG Wei-Rong1, YUAN Jia-Hai1,2()   

  1. 1 School of Economics and Management, North China Electric Power University, Beijing 102206, China
    2 Beijing Key Laboratory of New Energy and Low-Carbon Development, Beijing 102206, China
  • Received:2022-08-01 Revised:2022-12-13 Online:2023-05-30 Published:2023-02-17


Based on the current situation of China’s coal power and the development trend of carbon market and power market, the impact of carbon allowance allocation rules on power generation revenue of 1000 MW, 600 MW and 300 MW coal-fired units under six carbon prices and three pass-through rates were simulated with economic dispatch model. The results show that the 300 MW units are sensitive to the change in carbon allowance baseline and auction ratio. At the initial period of the coupling between carbon market and power market with carbon price of CNY 50.0 yuan/t, CNY 79.9 yuan/t and a pass-through rate of 20%, if allowances baseline drops to 0.74 t CO2/(MW∙h) or the auction ratio rises to 50%, 300 MW and 600 MW units will have negative returns. However, when the carbon price and its pass-through rate increase, the negative effect on coal power units caused by the change in carbon allowance baseline and auction ratio is more manageable. The expansion of certified emission reduction ratio has little effect on the improvement of unit revenue, which can be a beneficial supplement to carbon market and be controlled. Therefore, after full consideration of coal power capacity and competitiveness, it is necessary to formulate carbon allowance allocation rules to adapt to the development stages of carbon market and power market, actively promote the coupling of the two markets to pass through carbon costs and cooperate with the offset mechanism to accelerate carbon emission reduction.

Key words: Carbon allowance, Coal power, Economic dispatch model, Power generation revenue, Pass-through rate

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