CAEP and Tsinghua University Co-Publish in Nature Communications —— Revealing the Benefit Loss Due to Uncertainty in China's Coal Power Low-Carbon Transition

 

On March 13, a joint research team composed of CAEP and Tsinghua University, among other institutions, collaboratively published a research paper titled "Cost-effectiveness uncertainty may bias the decision of coal power transitions in China" in Nature Communications. The paper establishes an uncertainty analysis framework for China's coal power retirement strategy under multiple objectives, innovates massive scenario optimization technology, quantifies the cost-effectiveness of various coal power transition pathways in China, analyzes the cost-effectiveness uncertainty brought about by pathway perturbations, and reveals how uncertainty in China's low-carbon transition of coal power may lead to differences in climate, environmental, health benefits, and economic costs, as well as deviations from policy objectives. Dr. Lei Yu, Director of the Institute of Atmospheric Environment at our Academy, is a corresponding author of the paper, and other authors from our institute include Associate Researcher Zheng Yixuan and Assistant Researcher Chen Chuchu.

Electricity generation is the sector with the largest coal consumption in China, emitting large amounts of carbon dioxide and air pollutants. Although a series of policies such as the elimination of backward production capacities, ultra-low emission transformations, and energy-saving and carbon reduction renovations have significantly reduced air pollution emissions in the coal power industry, the health risks posed by coal power pollution emissions are still not negligible, and carbon dioxide emissions remain high. Under the goals of carbon neutrality and a beautiful China, it is urgent to promote the transformation of the coal power industry and push for the coordinated management of pollution reduction and carbon emission reduction in the coal power industry. Existing studies have designed coal power retirement pathways that optimize health co-benefits and minimize asset stranding from the perspective of unit scale, but the actual retirement of coal power may be influenced by multiple factors, leading to deviations in environmental, climate, economic benefits, and costs from the optimal expectations.

To quantify the impact of uncertainty in China's coal power transition, the research team coupled integrated assessment models, atmospheric chemical transport models, exposure-response equations, and coal power transition cost-effectiveness evaluation methods to propose an uncertainty analysis framework for China's coal power unit transition strategy aimed at multi-objective decision-making. Based on this model framework, the team designed multiple targeted transition pathways starting from the heterogeneous characteristics of unit-level coal power asset stranding risks, carbon emission reduction benefits, and health impacts, quantitatively characterized the transition costs and climate, environmental, and health benefits and their uncertainties, and revealed the degree of deviation of the low-carbon transition benefits of China's coal power under uncertainty through multi-criteria decision analysis.

The study found that the distribution of carbon emissions and health risks of operating coal power units shows significant heterogeneity: nearly a quarter of carbon emissions are caused by coal power units accounting for 10% of the installed capacity, and coal power units accounting for 2% of the installed capacity cause over 25% of the health risks in the coal power industry. Implementing targeted retirement strategies is expected to achieve significant benefits in carbon emission reduction and public health protection.

The study further analyzes the differences in coal power unit retirement pathways from the perspective of asset stranding, carbon reduction, and health benefits, based on the heterogeneous characteristics of coal power units. By conducting perturbation simulation analysis of tens of thousands of retirement pathways, the study finds that uncertainty may delay the time when the retirement policy first achieves positive benefits, and continuing with the current retirement strategy may lead to a six-year delay in achieving positive benefits . The implementation of any retirement policy carries a certain degree of risk, and not all strategies can guarantee a 100% cumulative net benefit, especially targeted retirement strategies that prioritize carbon reduction and asset stranding avoidance, and the continuation of current retirement strategies, both have a certain probability of leading to cumulative negative effects. Under the interference of policy execution uncertainty, even if the coal power retirement strategy is designed strictly according to policy objectives, there is still a possibility of missing the opportunity to implement the most suitable retirement policy . The study shows that coal power retirement should minimize policy execution interference, reduce the risk of negative effects, and select the most suitable strategy according to targeted policy objectives to guide the orderly low-carbon transition of China's coal power units.

The research reveals the impact of uncertainty in China's coal power low-carbon transition policy and the spatiotemporal randomness of new capacity construction on decision-making and benefits, indicating the importance of limiting policy disturbance and adopting coal power transition strategies based on targeted policy objectives for improving the quality and efficiency of coal power transitions. The study proposes policy recommendations for the formulation of carbon neutrality and clean air co-governance pathways, stating that the low-carbon transition of energy structure does not always bring positive net benefits. When designing and implementing relevant energy policies, top-level design should be strengthened, always adhering to the overall strategic objectives, reducing the risk of energy policy uncertainty, and promoting a smooth transition to a low-carbon power system.

The study further analyzes the differences in coal power unit retirement pathways from the perspective of asset stranding, carbon reduction, and health benefits, based on the heterogeneous characteristics of coal power units. By conducting perturbation simulation analysis of tens of thousands of retirement pathways, the study finds that uncertainty may delay the time when the retirement policy first achieves positive benefits, and continuing with the current retirement strategy may lead to a six-year delay in achieving positive benefits (Figure 1). The implementation of any retirement policy carries a certain degree of risk, and not all strategies can guarantee a 100% cumulative net benefit, especially targeted retirement strategies that prioritize carbon reduction and asset stranding avoidance, and the continuation of current retirement strategies, both have a certain probability of leading to cumulative negative effects. Under the interference of policy execution uncertainty, even if the coal power retirement strategy is designed strictly according to policy objectives, there is still a possibility of missing the opportunity to implement the most suitable retirement policy (Figure 2). The study shows that coal power retirement should minimize policy execution interference, reduce the risk of negative effects, and select the most suitable strategy according to targeted policy objectives to guide the orderly low-carbon transition of China's coal power units.

Xizhe Yan, Dan Tong*, Yixuan Zheng, Yang Liu, Shaoqing Chen, Xinying Qin, Chuchu Chen, Ruochong Xu, Jing Cheng, Qinren Shi, Dongsheng Zheng, Kebin He, Qiang Zhang, Yu Lei* . Cost-effectiveness uncertainty may bias the decision of coal power transitions in China. Nat. Commun. 15, 2272 (2024).