AUTHOR=Dang Guoying , Jiang Chi , Liu Zhaoyang 

TITLE=Analysis of the tripartite evolutionary game in the marketization of China’s renewable energy-based electricity prices

JOURNAL=Frontiers in Energy Research

VOLUME=Volume 11 - 2023

YEAR=2023

URL=https://www.frontiersin.org/journals/energy-research/articles/10.3389/fenrg.2023.1272497

DOI=10.3389/fenrg.2023.1272497

ISSN=2296-598X

ABSTRACT=The evolution of China's renewable power pricing regulation from subsidy-driven fixed feed-in tariffs (FIT) to market-oriented, quota-based renewable portfolio standards (RPS) is a crucial institutional transformation designed to advance the low-carbon energy transition. In this study, an in-depth examination of the interests and decision-making behavior of the government reveals that renewable and coal-fired power producers, as major participants in the low-carbon energy transition, hold significant importance. This article constructs a tripartite evolutionary game model under both nonmandatory and mandatory quotas and employs MATLAB software to simulate and assess the effectiveness of a green certificate trading system in the presence of mandatory quotas. Based on stable equilibrium strategies, it discusses the impact of FIT on green certificate trading under four different subsidy withdrawal strategies and three quota and penalty scenarios. The results indicate the following: first, when renewable power producers certify and engage in green certificate trading, coal-fired power producers purchase green certificates, and the government implements mandatory quotas, the game subjects achieve an equilibrium strategy combination. Second, it validates the effectiveness of the RPS-TGC (i.e., the green certificate trading system in the presence of mandatory quotas) electricity price regulation model and identifies the theoretical root causes of the failure of China's existing voluntary green certificate trading system. Third, it suggests that FIT subsidies should be gradually withdrawn, with renewable power quotas set to 20% and penalty standards set to 1.5P. This facilitates a faster convergence of strategies between renewable and coal-fired power producers, thereby leading to stable equilibria and aiding China's transition from the FIT model, which is driven by government incentives, to the market-oriented RPS-TGC model of electricity price regulation.