Low-carbon transition model for power generation companies in China: A case study

The power sector is the largest emitter of carbon dioxide in China, and the coal-based energy structure presents an additional challenge to its decarbonization. Several studies have been conducted to find cost-optimal pathways for the low-carbon transition of the power sector or individual power plants, but few studies have taken power generation companies as a research topic. In this paper we addressed the issue by building an optimization model that can characterize power generation companies, and selected a big company as a case to study how economic and technological factors drive the company to adjust its plant allocation and affect its profitability. We find that the transformation trajectory of the company is similar to that of the power sector as a whole. The share of coal power plants will remain stable at 53% during this decade and then decline rapidly after 2030. At the same time, the proportion of renewables will rise rapidly from 35% in 2020 to 90% by 2060. The total cost of achieving the carbon neutrality target is approximately RMB 4.6 trillion during 40 years, and the annual cost is approximately RMB 114.9 billion, which is equivalent to about 40% of its total revenue in 2021. Analysis of different scenarios suggests that achieving carbon neutrality 5 to 10 years ahead of time is financially and technologically feasible. Energy storage will play a significant role whereas CCS will have little impact on this company.