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Under the current technical conditions and power mix in China, flexible modified thermal power units must provide enough flexibility resources for new power system since the potential of flexible resource has not been fully used. In this paper, a bi-level model is proposed to characterize the decision behavior of the generation company in the case of individual rationality and generation-side coordination. The model fully considers the concrete conditions of China and the technical differences between thermal power units in the multi-market (including energy, ancillary services and carbon emission trading market). The bi-level model could be reconstructed into an equivalent MILP model which can be solved directly. The strategic bidding behavior of small capacity units in the energy market show the urgency to enhance the transmission of deep peak regulation price compensation signals. The coupling of multi market is likely to be the most effective policy package to guide large-scale units to play a supporting role and small-scale units to assume the regulating function to play a role in the transition to a low-carbon future. Long-term policy mechanisms should be developed, combining electricity transition with the mechanisms in the carbon emission trading market to achieve the integral maximization of environmental benefit. • A bi-level model coupling energy, ancillary services and CET market is proposed. • A clearing model from the perspective of system integral orientation is proposed. • The technical differences of coal-fired power units are fully considered. • The analysis results provide policy implications tailored to the Chinese context. [ABSTRACT FROM AUTHOR]

To fulfill the goals of sustainable development and emission reduction, China has established the consumption side renewable portfolio standards (RPS) and domestic nationwide carbon emission trading (CET) scheme. However, there are intricate interrelationships between the two mechanisms as they overlap in policy goals and implementation measures, which might lead to policy synergy or policy ineffectiveness. Therefore, investigating the coupling effects in the context of policy coexistence is imperative for policy optimization and realization of the policy objectives. In this study, a simulation model cooperating the electricity market, the excess consumption trading market, the tradeable green certificates (TGC) market and the CET market, based on the system dynamics (SD) methodology is proposed. The paper comprehensively investigated the complex relationship between the four markets and conducted experiments with different scenario settings in RPS quota goal and carbon quota goal. The results illustrate that: (1) Both mechanisms can facilitate the expansion of renewable electricity and improve the power supply structure. (2) The quota goals of the two policies should be reasonably set as they contain both the abovementioned overlapping effects, as well as conflicts in the effects on the total electricity supply and electricity price. (3) The consumption side RPS is conductive for market absorption of renewable electricity with a proper higher RPS quota goal. (4) The TGC market is oversupplied, and the price keep decreasing under the consumption side RPS, more demand incentive mechanisms are required for TGC market. • Implementation mechanism and effects of the consumption side RPS are investigated. • Policy coordination between the consumption side RPS and CET in China are examined. • The effects of consumption side RPS and CET have both overlaps and conflicts. • Ratio of renewable electricity consumption is positively correlated with RPS quota goal. [ABSTRACT FROM AUTHOR]

To fulfill the goals of sustainable development and emission reduction, China has established the consumption side renewable portfolio standards (RPS) and domestic nationwide carbon emission trading (CET) scheme. However, there are intricate interrelationships between the two mechanisms as they overlap in policy goals and implementation measures, which might lead to policy synergy or policy ineffectiveness. Therefore, investigating the coupling effects in the context of policy coexistence is imperative for policy optimization and realization of the policy objectives. In this study, a simulation model cooperating the electricity market, the excess consumption trading market, the tradeable green certificates (TGC) market and the CET market, based on the system dynamics (SD) methodology is proposed. The paper comprehensively investigated the complex relationship between the four markets and conducted experiments with different scenario settings in RPS quota goal and carbon quota goal. The results illustrate that: (1) Both mechanisms can facilitate the expansion of renewable electricity and improve the power supply structure. (2) The quota goals of the two policies should be reasonably set as they contain both the abovementioned overlapping effects, as well as conflicts in the effects on the total electricity supply and electricity price. (3) The consumption side RPS is conductive for market absorption of renewable electricity with a proper higher RPS quota goal. (4) The TGC market is oversupplied, and the price keep decreasing under the consumption side RPS, more demand incentive mechanisms are required for TGC market. • Implementation mechanism and effects of the consumption side RPS are investigated. • Policy coordination between the consumption side RPS and CET in China are examined. • The effects of consumption side RPS and CET have both overlaps and conflicts. • Ratio of renewable electricity consumption is positively correlated with RPS quota goal. [ABSTRACT FROM AUTHOR]