Research on optimal benchmark price of tradable green certificate based on system dynamics: A China perspective

Renewable portfolio standard (RPS) is a compulsory institutional change to achieve low-carbon energy transformation in China. Its success depends on the scientific system quasi-parameter design, the most important system quasi-parameter is the benchmark price of the tradable green certificate (TGC). Setting the benchmark price of TGC scientifically and reasonably in line with China's national conditions is conducive to the effective implementation of RPS in China. Based on the system dynamics (SD) to construct China's green certificate trading market model, this paper analyzes the interaction between the TGC market and the electricity market under the RPS, and uses Vensim simulation to simulate the optimal TGC benchmark price based on the maximization of social welfare. The results show that the TGC market and the electricity market are mutually influential. As the benchmark price of TGC increases, the total power generation increases and the on-grid price decreases. Consumer surplus, producer surplus and social welfare all reach the maximum when the TGC benchmark price is 0.4yuan/KWh, so determines 0.4yuan/kWh as the optimal benchmark price of TGC. (C) 2019 Elsevier Ltd. All rights reserved.