The impact of inter-regional transmission grid expansion on China's power sector decarbonization

- We quantify the energy, economic and environmental implications of inter-regional transmission grid expansion for China by 2030.
- The expansion largely benefits China in reducing generation costs and in securing power supply across regions.
- The expansion has a limited impact on mitigating the curtailment of renewable generation by 2030.
- The expansion slightly increases CO2 emissions of the power supply in 2030.

This paper investigates the impact of the inter-regional transmission grid capacity expansion on China's power sector decarbonization from the energy portfolio, economic efficiency and environmental perspectives. The impact is quantified based on a cluster integer unit commitment model which renders it suitable for modeling large-scale power systems with a high computational performance. The results show that, first, the inter-regional transmission grid capacity expansion has obvious economic benefit in reducing the total variable generation costs, mainly due to the increased ability of transmitting coal power with low marginal generation costs and the reduction in non-served load. Second, the expansion has a very limited impact on reducing the curtailment of renewable generation by 2030, although the extent to which the expansion can mitigate the curtailment of renewable generation increases with the share of renewable power in the generation portfolio. Third, the expansion increases CO2 emissions of the power supply in 2030 by around 2%, mainly because it facilitates more use of cheap yet low-efficiency coal generation in regions with low fuel prices. To better deliver the value of the inter-regional grid expansion for China's power decarbonization, this paper proposes that: (1) the planning of the inter-regional and intra-regional grid development should be coordinated with the renewable power development; and (2) effective dispatch mechanisms which account for CO2 emissions or generation efficiency across regions should be established. Additionally, the government plan of the inter-regional transmission capacity in 2030 is basically sufficient in enabling bulk power delivery and promoting renewable generation across regions.