Designing tax and subsidy incentives towards a green and reliable electricity market

摘要

Incentive schemes and policies play an important role in reducing carbon emissions from electricity generation. This paper investigates designing tax and subsidy incentives towards a reliable and low emission electricity market, using Australia's National Electricity Market as a case study. In this work, a novel framework is proposed to design interactive tax/subsidy incentives on both emission reduction and resource adequacy in competitive electricity markets as a game model. In our model, market participants decide on their capacity expansion/retirement strategies considering the impact of designed incentive schemes on their long-term operation such that the desired levels of emission reduction and fast response generation are achieved in the network. The simulation results for Australia's electricity market during 2017-2052, indicate the necessity of incentive policies, in spite of the cost reduction trajectory for renewable technologies, to reach the emission intensity reduction above 45% in the market by 2052. In 80% emission intensity reduction scenario, the designed incentive schemes highly encourage the investment on synchronous renewables, +17 GW, storage technologies, +15.7 GW, and transmission lines, +1.6 GW, to support high additional penetration of Variable Renewable Energy, wind and solar, +39 GW, which paves the way to transition to a green and reliable electricity market.