Feasibility analysis of introducing the Carbon market into the fuel-switching project in Tianjin City

摘要

This paper calculated the economic parameters of coal-fired and gas-fired heating systems which based on a fuel-switching project in Tianjin of China. The feasibility study also analyzed for introducing carbon trading into the project. Through analyzing the economics of fuel-switching project under normal operating conditions, it is found that if there is no government financial support, the project would face financial barriers and lack of economic attractiveness. In order to ensure its smooth implementation, this paper proposes to introduce a carbon trading scheme into the fuel-switching project. The carbon trading scheme can improve the IRR (Internal Rate of Return) and shorten the payback period and breakeven point, and it also encourages the same projects moving forward in the north heating areas of China.