Economic analysis of coal power by province under the coal capacity tariff mechanism

WU Zifeng; MA Ruizhi; JIANG Yikang; ZHANG Haonan

Abstract：The coal power capacity tariff mechanism is not only an important way to improve the power market system and accelerate the construction of the new power system,but also an effective way to meet the realistic demand for coal power transformation and increase its ability to survive.Based on China's power market trading rules and capacity tariff compensation standards,an economic assessment model is constructed,including indicators such as levelized cost of electricity(LCOE),average revenue of electricity,coal price affordability and profitability,to analyze the economics of coal power units in various provinces of China over different operating years.The results showed that,in terms of operating years,capacity revenue improves the economy of the older units more significantly,which plays a role in turning losses into profits for units that have been in operation for ten years,whereas for units that have been in operation for twenty years,it is to realize the transformation from a lower level of profitability to a higher level.In terms of locations,capacity revenue benefits the units in places where coal pricesare high,electricity pricesare low,and the coal powertransition is more rapid.Finally,proposals for further improving the capacity tariff mechanism are presentedfrom three perspectives:national macroeconomics,power market and coal power enterprises.