Title: The profitability of onshore and wind and solar PV power projects in China : a comparative study
Authors : Tu, Qiang
Betz, Regina
Mo, Jianlei
Fan, Ying
et. al : No
Published in : Energy policy
Volume(Issue) : 132
Pages : 404
Pages to: 417
Publisher / Ed. Institution : Elsevier
Issue Date: 2019
License (according to publishing contract) : Licence according to publishing contract
Type of review: Peer review (publication)
Language : English
Subjects : Carbon pricing; Feedin tariff (FIT); Profitability; Solar PV power
Subject (DDC) : 333.7: Land, recreational areas and energy
Abstract: Despite the rapid development of renewable energy power in China, the sector is facing significant challenges in the form of declining feed-in tariffs (FIT) and serious curtailment problems. However, in the long-run the nationwide carbon emission trading system may provide a new economic incentive to invest in renewable energy projects in China. Against this background, we assess the effect of gradually declining FIT on the profitability of renewable energy power projects in China and evaluate the potential of a carbon price to overcome the resulting financial gap. Based on a dataset of 1552 onshore wind and 414 solar PV power projects from 2010 to 2015, we first estimate the levelized cost of electricity (LCOE) for onshore wind and solar PV investments. We then estimate profitability using different carbon prices and varying levels of FIT. Our findings suggest that revenues from selling certified carbon emissions reductions in the carbon market can compensate partially for the revenue losses caused by declining FIT. However, the current carbon prices of China's carbon-emission trading pilot schemes are not sufficiently high to compensate for revenue losses. For 90% of PV projects to remain profitable with lower FIT, the carbon price would need to rise to USD 64/t of CO2. For on-shore wind plants, lower carbon price levels of up to USD 41/t CO2 would be sufficient.
Departement: School of Management and Law
Organisational Unit: Center for Energy and Environment (CEE)
Publication type: Article in scientific journal
DOI : 10.1016/j.enpol.2019.05.041
ISSN: 0301-4215
URI: https://digitalcollection.zhaw.ch/handle/11475/17713
Appears in Collections:Publikationen School of Management and Law

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