ABSTRACT
The outbreak of COVID-19 pandemic has increased the production costs of renewable energy facilities and undermines the profitability of renewable energy investment. Green finance polices, e.g. carbon pricing, tradable green certificate (TGC) and green credit, can provide low-cost finances and counteract the adverse effects of COVID-19 pandemic. In this work, the generation costs of offshore wind power before and after the COVID-19 pandemic in China are analyzed using the data of 97 offshore wind power projects implemented in the period of 2014-2020, and the effect of green finance policy on the generation cost and the project profitability are evaluated. The results show that the average levelized cost of electricity (LCOE) of offshore wind power decreased from 0.86 CNY/kWh in 2014 to 0.72 CNY/kWh in 2019, while it increased to 0.79 CNY/kWh in 2020, i.e. 10.85% increase relative to that in 2019. With the average carbon price of 50 CNY/t CO2, the average TGC price of 170 CNY and the green-credit policy being introduced, the average LCOE decreases to 0.76 CNY/kWh, 0.67 CNY/kWh and 0.74 CNY/kWh respectively. The green finance policy mix is still necessary to support the offshore wind power investment during the Covid-19 pandemic.
ABSTRACT
As the country with the world's largest coal power capacity, China is launching a national carbon market. How the carbon pricing may contribute to phasing out China's coal power is a great concern. We collect full-sample data set of China's 4540 operating coal plant units and develop a stochastic Monte-Carlo financial model to assess the financial sustainability of the plant operation. Although China's coal plants have long residual technical lifetime, their operations are close to the break-even state. Even with low carbon price of 50 CNY/tCO2 growing at 4%/y and the permits being fully auctioned, the average residual lifetime of all the plants will be reduced by 5.43 years, and the cumulative CO2 emission from 2020 to 2050 will be reduced by 22.73 billion ton. The spatial disparity in the carbon pricing effect is significant, and the western regions are more vulnerable to the carbon pricing risk than the eastern regions.
ABSTRACT
The EU Emission Trading System (ETS) is the oldest and currently the largest carbon market in the world, but its purpose of stimulating carbon emissions via trading profits remains unexamined. Based on the complete firm-level transaction records of the EU ETS Phases I and II, here we show that the participating firms' trading profits and their emission abatements are positively correlated, and the correlation becomes stronger in Phase II than Phase I. Specifically, we observe that non-linearity exists in the correlation; higher firm-level emission abatements can realize larger trading profits. This pattern affects the market fairness, though it may be helpful to incentivise emission abatements. The correlation is more regulated in Phase II than it is in Phase I, thereby indicating that the Phase II is more mature. We also observe that the state-level abatements are largely driven by industrial giants.
