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Chinese Journal of Management Science ›› 2021, Vol. 29 ›› Issue (4): 16-25.doi: 10.16381/j.cnki.issn1003-207x.2019.0518

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Study on Emission Reduction and Economic Benefits of the Retirement and Technology Upgrade of Coal-fired Units—A Robust Generation Expansion Planning Approach

ZHONG Zhi-ming1,2, LI Xing-mei1,2   

  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, North China Electric Power University, Beijing 102206, China
  • Received:2019-04-15 Revised:2019-09-02 Published:2021-04-25

Abstract: Nowadays, environmental problems result from the overconsumption of fossil fuels have drawn a lot of attentions all over the world. Therefore, reducing the air pollution emissions come from the burning of fossil fuels has been a significant and inevitable trend in the future. In China, electricity industry is one of the most important industries in which the implement of emission reduction strategy is imperative. The electricity industry in China is dominated by high-polluted coal-fired thermal power units. In recent several years, China has introduced a series of energy policies to encourage the retirement and ultra-low emission retrofit for coal-fired units. This paper aims at answering the following three questions: 1) How much will the retirement and ultra-low emission retrofits of coal-fired units contribute to the emission reduction in electricity industry? 2) How to make the optimal planning when the investment of new candidate units and the retirement and ultra-low emission retrofit of existing coal-fired units are simultaneously considered and 3) How do the uncertainties of policy and market factors affect the decision-making of generation companies? To deal with these three problems, a novel robust optimization model is proposed. For the convenience of computation, column and constraint generation algorithm is adopted to solve the problem. The following three conclusions can be drawn from the numerical example: 1) The retirement and ultra-low emission retrofit of coal-fired units can improve both the economic and environmental benefits of electric power systems, by reducing the air pollution emissions. 2) The higher the electricity demand is, the more coal-fired units will be retrofitted. 3) The decisions of retirement and ultra-low emission retrofit of coal-fired units are sensitive to environmental tax and subsidy. Even if there is no subsidy, the environmental tax today is enough to encourage the retirement and ultra-low emission retrofits of high-polluted coal-fired units.

Key words: coal-fired unit, retirement, ultra-low emission retrofit, robust optimization, generation expansion planning

CLC Number: