• Harmonise trading arrangements between
different transmission systems. Use price to
determine flows between interconnected
provincial and regional transmission systems,
signalling which provinces or regions could
benefit from new investment. Price can
stimulate lower-cost power plants to respond
more efficiently to demand.
• Implement time-of-use pricing. Time-of-use
pricing gives consumers the flexibility to
respond to variations in electricity prices and
demand. Again, it can proceed gradually, starting
with larger consumers, such as industrial facilities with flexible production schedules, and
ending with smart household appliances.
4.3.3 Launch Market Trials
Progressively
• Carry out small-scale trials. Carry out
small-scale trials to competitively procure
new transmission investments in non-network
alternatives like microgrids or distributed
energy resources, ancillary services and so
on. Use competitive bidding or auctions for
the trials. These could provide valuable
proof-of-concept experience, as well as
innovative and cost-effective solutions. To be
successful, procurement must be open and
transparent.
• Progressively introduce market-oriented procurement. If the competitive procurement trials
are successful, they can be scaled up and wider
market procurement progressively introduced,
where appropriate, across each electricity
system. Market procurement can reveal information about the relative cost and benefits of a
range of power generation technologies.
4.3.4 Optimise the Power Management
Structure
The power management structure includes an
enhanced role for market procurement and a
regulated transmission system operator (TSO) or
independent system operator (ISO). International experience of the regulated TSO or ISO
model is yet to reveal the best performer of the
two, so it is more important to adopt a good
quality model early than to choose between the
options.
4.4 Reform and Improve New Energy
Subsidy Policies
4.4.1 The Combination of Carbon
Pricing and New Energy
Subsidy Policies Can
Deliver Better Results
The present study shows that the implementation
of carbon pricing policies will have a significant
impact on total energy consumption. As the initial carbon pricing level increases, total energy
consumption will decrease. The effects of carbon
pricing policies will be evident in the short term
and become significant over time.
In contrast to carbon pricing policies, the
introduction of renewable energy subsidies will
increase total energy consumption. Subsidy
policies will have a less significant impact on
total energy consumption than carbon pricing
policies. In the scenario that incorporates both
carbon pricing and renewable energy subsidies,
total energy consumption will be higher than in
the pure carbon tax scenario but lower than in the
subsidy policy scenario.
The scenarios reveal an important insight. If
governments are concerned that the introduction
of carbon pricing will have a significant negative
impact on energy consumption, they can introduce non-fossil energy subsidy policies at the
same time. This will increase non-fossil energy
consumption and reduce fossil energy use,
thereby ensuring a smooth transition in the
overall level and patterns of energy consumption
(Fig. 24).
32
X. Zhaoyuan and M. Ishwaran
different transmission systems. Use price to
determine flows between interconnected
provincial and regional transmission systems,
signalling which provinces or regions could
benefit from new investment. Price can
stimulate lower-cost power plants to respond
more efficiently to demand.
• Implement time-of-use pricing. Time-of-use
pricing gives consumers the flexibility to
respond to variations in electricity prices and
demand. Again, it can proceed gradually, starting
with larger consumers, such as industrial facilities with flexible production schedules, and
ending with smart household appliances.
4.3.3 Launch Market Trials
Progressively
• Carry out small-scale trials. Carry out
small-scale trials to competitively procure
new transmission investments in non-network
alternatives like microgrids or distributed
energy resources, ancillary services and so
on. Use competitive bidding or auctions for
the trials. These could provide valuable
proof-of-concept experience, as well as
innovative and cost-effective solutions. To be
successful, procurement must be open and
transparent.
• Progressively introduce market-oriented procurement. If the competitive procurement trials
are successful, they can be scaled up and wider
market procurement progressively introduced,
where appropriate, across each electricity
system. Market procurement can reveal information about the relative cost and benefits of a
range of power generation technologies.
4.3.4 Optimise the Power Management
Structure
The power management structure includes an
enhanced role for market procurement and a
regulated transmission system operator (TSO) or
independent system operator (ISO). International experience of the regulated TSO or ISO
model is yet to reveal the best performer of the
two, so it is more important to adopt a good
quality model early than to choose between the
options.
4.4 Reform and Improve New Energy
Subsidy Policies
4.4.1 The Combination of Carbon
Pricing and New Energy
Subsidy Policies Can
Deliver Better Results
The present study shows that the implementation
of carbon pricing policies will have a significant
impact on total energy consumption. As the initial carbon pricing level increases, total energy
consumption will decrease. The effects of carbon
pricing policies will be evident in the short term
and become significant over time.
In contrast to carbon pricing policies, the
introduction of renewable energy subsidies will
increase total energy consumption. Subsidy
policies will have a less significant impact on
total energy consumption than carbon pricing
policies. In the scenario that incorporates both
carbon pricing and renewable energy subsidies,
total energy consumption will be higher than in
the pure carbon tax scenario but lower than in the
subsidy policy scenario.
The scenarios reveal an important insight. If
governments are concerned that the introduction
of carbon pricing will have a significant negative
impact on energy consumption, they can introduce non-fossil energy subsidy policies at the
same time. This will increase non-fossil energy
consumption and reduce fossil energy use,
thereby ensuring a smooth transition in the
overall level and patterns of energy consumption
(Fig. 24).
32
X. Zhaoyuan and M. Ishwaran