A multi-period optimization model for planning of China's power sector with consideration of carbon dioxide mitigation—The importance of continuous and stable carbon mitigation policy

• A multi-stage optimization model for planning the power sector is applied as basis.
• Difference of ideal and actual decision making processes are proposed and analyzed.
• A “continuous & stable” policy and a “loose first & tight later” one are designed.
• 4 policy scenarios are studied applying the optimal planning model and compared.
• The importance of “continuous & stable” policy for long term is well demonstrated.

A great challenge China's power sector faces is to mitigate its carbon emissions whilst satisfying the ever-increasing power demand. Optimal planning of the power sector with consideration of carbon mitigation for a long-term future remains a complex task, involving many technical alternatives and an infinite number of possible plants installations, retrofitting, and decommissioning over the planning horizon. Previously the authors built a multi-period optimization model for the planning of China's power sector during 2010–2050. Based on that model, this paper executed calculations on the optimal pathways of China's power sector with two typical decision-making modes, which are based on “full-information” and “limited-information” hypothesis, and analyzed the impacts on the optimal planning results by two typical types of carbon tax policies including a “continuous and stable” one and a “loose first and tight later” one. The results showed that making carbon tax policy for long-term future, and improving the continuity and stability in policy execution can effectively help reduce the accumulated total carbon emissions, and also the cost for carbon mitigation of the power sector. The conclusion of this study is of great significance for the policy makers to make carbon mitigation policies in China and other countries as well.