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White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 1 Jiangsu province in China has been at the forefront of the energy transition in recent years. Jiangsu’s energy authority issued “Guidelines for Jiangsu Province to Improve the Regulation Capacity of the Power System”, which proposes taking comprehensive measures to improve flexibility and adaptability in order to achieve safe, efficient, clean and low-carbon development of the power system. Based on bilateral energy cooperation between China and Finland, Wärtsilä and the Energy Power Planning & Engineering Institute (EPPEI) jointly launched the study project “Enhancing Power System Flexibility: Finnish Experience and Application in Jiangsu”. This study aims to identify the optimal path towards more renewable energy sources (RES) for Jiangsu by improving its power system flexibility. It considers three scenarios – baseline, moderate RES and high RES – and shows how the optimal path to more renewables can help lower system costs while maintaining system reliability. CONTENTS SUMMARY 1 MARKET BACKGROUND 3 MODELLING THE OPTIMAL PATH TO SUSTAINABLE POWER SYSTEMS 8 POWER SYSTEM MODELLING RESULTS 12 RECOMMENDATIONS AND BENEFITS 14 CONCLUSION 22 White paper on power system optimisation THE PATH TOWARDS A FUTURE OF HIGH RENEWABLE ENERGY IN JIANGSU, CHINA

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White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 1

Jiangsu province in China has been at the forefront of the energy transition in

recent years. Jiangsu’s energy authority issued “Guidelines for Jiangsu Province

to Improve the Regulation Capacity of the Power System”, which proposes taking

comprehensive measures to improve flexibility and adaptability in order to achieve

safe, efficient, clean and low-carbon development of the power system.

Based on bilateral energy cooperation between China and Finland, Wärtsilä

and the Energy Power Planning & Engineering Institute (EPPEI) jointly launched

the study project “Enhancing Power System Flexibility: Finnish Experience and

Application in Jiangsu”. This study aims to identify the optimal path towards

more renewable energy sources (RES) for Jiangsu by improving its power system

flexibility. It considers three scenarios – baseline, moderate RES and high RES

– and shows how the optimal path to more renewables can help lower system

costs while maintaining system reliability.

CONTENTS

SUMMARY 1

MARKET BACKGROUND 3

MODELLING THE OPTIMAL PATH TO

SUSTAINABLE POWER SYSTEMS 8

POWER SYSTEM MODELLING

RESULTS 12

RECOMMENDATIONS AND

BENEFITS 14

CONCLUSION 22

White paper on power system optimisation

THE PATH TOWARDS A FUTURE OF HIGH RENEWABLE ENERGY IN JIANGSU, CHINA

2 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

Jiangsu has been at the forefront of the energy transition in recent years.

In order to achieve this, flexible gas-based capacity is needed to integrate

renewables and provide peak regulation. This capacity includes multiple power

solutions such as efficient and flexible gas-based internal combustion engine (ICE)

power plants as well as battery energy storage.

In particular, the fast ramp-up and ramp-down rates of high-efficiency ICE power

plants allow the system to meet the need for short-term rapid response when

integrating renewables.

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 3

II. MARKET BACKGROUND

Jiangsu province, located on the east coast of mainland China, has a total

area of 107,000 square kilometres and a population of 80.5 million. Located in

the Yangtze river economic belt, the province has one of the highest levels of

economic development in China. In 2018, Jiangsu’s gross domestic product

(GDP) was 9.26 trillion CNY with an average annual growth rate of 6.7%.

Installed capacity

By the end of 2018, the total installed capacity of Jiangsu province was 126.6

GW, divided as follows:

• Coal-fired 78.8 GW, accounting for 62.3% of the total installed capacity of the

province

• Gas power 15.1 GW, pumped hydro 2.6 GW and nuclear power 4.4 GW

• Wind power 8.6 GW (including 3.0 GW offshore wind power, ranking number

one in China), accounting for 6.8% of the total installed capacity of the

province

• Solar power 13.3 GW, accounting for 10.5% of the total installed capacity of

the province

• Biomass 0.5 GW, waste power 1.0 GW

• Power-grid-side energy storage 0.1 GW

• Others (exhaust, residual heat, pressure, etc.) 2.1 GW

4 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

From 2005 to 2018, the peak load of Jiangsu increased from 35.8 GW to 105.7

GW, nearly tripling, with an average annual growth rate of 8.7%. In 2017, the peak

load of Jiangsu exceeded 100 GW for the first time, making it the first provincial

power grid in China to achieve this figure.

Figure 1. Total installed capacity

2018

Figure 2. Annual power generation

2018

62.6%

4.1%

2.0%

2.9%

9.3%

18.5%

0.6%

Gas SolarCoal WindNuclear Imported powerPumped hydro

Annual power generation 2018, Jiangsu

Total592.6

TWh

Total installation capacity in Jiangsu, 2018

1.6%3.5%

11.9%

18.6%

0.1%

2.1%

62.3%

Total126.7

GW

OthersPumped hydroGas Nuclear

StorageCoal

RenewablesBioSolar

WindWaste

11.9%

18.6%2.1%

10.5%

Total23.5

GW

62.6%

4.1%

2.0%

2.9%

9.3%

18.5%

0.6%

Gas SolarCoal WindNuclear Imported powerPumped hydro

Annual power generation 2018, Jiangsu

Total592.6

TWh

Total installation capacity in Jiangsu, 2018

1.6%3.5%

11.9%

18.6%

0.1%

2.1%

62.3%

Total126.7

GW

OthersPumped hydroGas Nuclear

StorageCoal

RenewablesBioSolar

WindWaste

11.9%

18.6%2.1%

10.5%

Total23.5

GW

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 5

In 2016 and 2017, due to the macroeconomic recovery and the extremely high

summer temperatures, the total electricity consumption in Jiangsu reached 545.9

TWh and 580.8 TWh respectively, which for both years represents an increase of

over 6% compared to the previous year. In 2018, the total electricity consumption

was 612.8 TWh, a 5.5% increase over 2019.

Jiangsu lies in a transitional area between warm temperate and subtropical zones,

having four distinct seasons with hot summers and cold winters. In summer, air

conditioner use by residents and industry significantly increases the load, resulting

in the largest daily peak-valley differences in July and August. As the load level

increases year by year, the annual maximum peak-valley difference shows an

upward trend.

Figure 3. Peak load 2005–2018

Figure 4. Total electricity

consumption 2005–2018

0

100

20

40

80

120

60GW

2018

2017

2016

2015

2014

2013

2012

2011

2010

2005

Peak load

Figure 3. Peak load 2005–2018, Jiangsu

Total electricity consumption 2005–2018, Jiangsu

0

600

700

500

100

200

400

800

300

TWh

2018

2017

2016

2015

2015

2014

2013

2012

2011

2010

2005

Total electricity consumption

Figure 5. Maximum and daily peak-valley di�erence rates, Jiangsu

0

25

5

10

20

30

15GW

2018

2017

2016

2014

2013

2012

2011

2005

2010

2000

Maximum peak-valley difference

0

100

20

40

80

120

60GW

2018

2017

2016

2015

2014

2013

2012

2011

2010

2005

Peak load

Figure 3. Peak load 2005–2018, Jiangsu

Total electricity consumption 2005–2018, Jiangsu

0

600

700

500

100

200

400

800

300

TWh

2018

2017

2016

2015

2015

2014

2013

2012

2011

2010

2005

Total electricity consumption

Figure 5. Maximum and daily peak-valley di�erence rates, Jiangsu

0

25

5

10

20

30

15GW

2018

2017

2016

2014

2013

2012

2011

2005

2010

2000

Maximum peak-valley difference

6 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

KEY CHALLENGES

Because Jiangsu is one of China’s leading provinces in terms of economic

development, its power demand will continue to grow in the future, presenting the

power supply sector with several challenges:

• Firstly, the development of coal-fired power is restricted according to the

principle of “coal reduction/equal coal”, which means new coal-fired power

plants cannot be built unless the equivalent capacity of existing coal-fired

power plants is shut down. In the future, coal-fired power units that have

low efficiency or which exceed their planned operational lifespan will also be

shut down, meaning Jiangsu will gradually become even more dependent on

imported power.

• Secondly, according to a power market capacity analysis with a 12% reserve

for the province, the power demand gap of Jiangsu province will reach

27 GW in 2026. In order to address this shortfall, the province will need to

increase the amount of power it imports from other provinces. However,

Jiangsu’s imported power will be unable to achieve this planned capacity due

to the national coal power capacity reduction policy and limits on the supply

end.

• Thirdly, the peak hours of electricity consumption and gas consumption

overlap in the winter. The high demand for electricity puts more pressure on

the system in terms of balancing and peaking. At the same time, the utilisation

of gas turbine units is restricted due to factors such as high winter gas prices

and the limited capacity of west-east gas transmission.

Figure 5. Maximum and daily

peak-valley difference rates

0

100

20

40

80

120

60GW

2018

2017

2016

2015

2014

2013

2012

2011

2010

2005

Peak load

Figure 3. Peak load 2005–2018, Jiangsu

Total electricity consumption 2005–2018, Jiangsu

0

600

700

500

100

200

400

800

300

TWh

2018

2017

2016

2015

2015

2014

2013

2012

2011

2010

2005

Total electricity consumption

Figure 5. Maximum and daily peak-valley di�erence rates, Jiangsu

0

25

5

10

20

30

15GW

2018

2017

2016

2014

2013

2012

2011

2005

2010

2000

Maximum peak-valley difference

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 7

These factors mean that there will be a growing pressure on power supply in

Jiangsu during peak times in summer and winter. In order to meet the demand,

Jiangsu will mainly develop power sources including gas power, energy storage,

nuclear power, pumped hydro storage and variable renewable energy sources.

With the acceleration of the transition to low-carbon power generation, a large

amount of RES is being connected to Jiangsu’s power grid, which not only puts

further pressure on power supply, but also poses a threat to the operational

stability of the province’s power system.

OUTLOOK FOR RENEWABLES

In recent years, the installed capacity of renewable energy in Jiangsu has been

developing rapidly. From 2010 to 2018, the installed capacity of wind power has

increased by 4.8 times, while the installed capacity of solar has increased from a

very low base to over 10 GW. It is expected that the installed capacity of wind and

solar power will further accelerate in the future.

In 2018, the installed capacity of solar and wind power in Jiangsu reached 10.2

GW and 6.8 GW respectively, meaning the total installed capacity had surpassed

the 18 GW target in the 13th Five-Year Plan. It is estimated that in 2020 installed

solar and wind power capacity will both reach 15 GW, surpassing the installation

capacity target by 88% and 50% respectively. It is also expected that in 2025, the

installed capacity of solar will reach 28.0 GW and the installed capacity of wind

22.0 GW.

According to research carried out by the Energy Research Institute of the National

Development and Reform Commission (ERI), the theoretical maximum capacity for

wind and solar power in Jiangsu is 95 GW for wind (including 20 GW of offshore

wind power) and 90 GW for solar.

It is expected that the installed capacity of wind and solar power will further accelerate in the future

Figure 6. Wind and solar

installation capacity

2015

Figure 6. Wind and solar installation capacity, Jiangsu

0

10

2

4

8

12

6GW

2018

2017

2016

2014

2013

2012

2011

2010

Wind Solar

2024

Figure 7. Power demand and peak demand forecasts, Jiangsu

0

200

400

800

1000

600

TWh G

W

0

50

100

200

250

150

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Energy demand forecast Peak demand forecast

8 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

III. MODELLING THE OPTIMAL PATH TO SUSTAINABLE POWER SYSTEMS

OBJECTIVES FOR THE ANALYSIS

Power supply planning using modern modelling methods can help prepare for

an optimal capacity mix with the lowest total system cost and optimal system

dispatch and operation. In this study, a full-scale chronological dispatch model

is used to obtain system dispatch curves under different scenarios in order to

analyse the performance of different power sources.

SCENARIOS CONSIDERED

• Scenario 1: Baseline (low RES). Based on the existing development plan,

adding 30 GW wind capacity and 30 GW solar capacity by 2030.

• Scenario 2: Moderate RES. Adding 50 GW wind capacity and 60 GW

solar capacity by 2030 to meet the national emission target and non-fossil-

fuel energy consumption target. The Energy Production and Consumption

Revolution Strategy (2016–2030) proposes that by 2030, non-fossil energy

power generation should account for approximately 50% of total power

generation, while carbon dioxide emissions will peak around 2030 with efforts

being made to reach the peak sooner.

• Scenario 3: High RES. Adding 85 GW wind capacity and 80 GW solar

capacity by 2030, which, according to a study carried out by the Energy

Research Institute, is considered to be the maximum renewable energy

potential in Jiangsu province.

INPUTS FOR THE MODELLING

Power demand forecast

Driven by economic and social development, power demand in Jiangsu will

continue to grow steadily. This study uses the prediction results of the State Grid

Corporation of Jiangsu Economic Research Institute:

ABOUT PLEXOS

ENERGY SIMULATION

SOFTWARE

PLEXOS by Energy

Exemplar is a proven

energy simulation

software used by system

operators, regulators and

planners as well as utilities,

traders, consultants and

manufacturers. Wärtsilä

uses PLEXOS globally for

power system modelling,

in both long-term capacity

development optimisation

and short-term dispatch

optimisation. PLEXOS is

designed to find the cost-

optimal solution for each

scenario based on the

applied constraints.

By 2025

• Jiangsu’s electricity consumption

will reach 84 TWh, with an

average annual growth of 4.4%

from 2019 to 2025.

• The peak load will reach 159 GW,

with an average annual growth of

6% from 2019 to 2025.

By 2030

• Jiangsu’s electricity consumption

will reach 90.5 TWh, with an

average annual growth of 1.5%

from 2025 to 2030.

• The peak load will reach 175 GW,

with an average annual growth of

2% from 2025 to 2030.

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 9

Annual load curve

In this study, an annual hourly load curve from 2019 to 2030 was generated

and verified based on the 2018 load curve of Jiangsu power grid. The annual

maximum load, load characteristics in different seasons, and daily peak-valley

differences are all shown.

Typical solar and wind profile

Typical annual wind and solar generation profiles for Jiangsu in China were used in

the modelling.

Figure 7. Power demand and peak

demand forecasts

Figure 8. Annual load curve

forecast (min interval: 1 hour)

2015

Figure 6. Wind and solar installation capacity, Jiangsu

0

10

2

4

8

12

6GW

2018

2017

2016

2014

2013

2012

2011

2010

Wind Solar

2024

Figure 7. Power demand and peak demand forecasts, Jiangsu

0

200

400

800

1000

600

TWh G

W

0

50

100

200

250

150

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Energy demand forecast Peak demand forecast

0

1.0

0.3

0.4

0.5

0.6

0.7

0.8

0.9

0.2

Norm

alise

d ou

tput

0.1

0

180

60

80

100

120

140

160

40

GW

20

Annual load curve

2018 2030Time

Figure 9. Wind power output characteristics and PV output characteristics in Jiangsu

Wind1-year average

10 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

Existing power plant parameters

Based on the conditions of the existing power units in Jiangsu, the main

parameters of the thermal power units used in this study are shown in table 1

below.

Comparison of candidate technologies

The study compared different candidate technologies that can provide power

system flexibility. Some of the main parameters are shown in table 2 below.

Parameter Unit Coal Gas

1,000 MW 600 MW 300 MW Yangcheng Independent Peaking CHP

Max. capacity MW 26,000 23,620 25,973 2,800 6,000 5,486 9,503

Min. stable factor % 40 40 60 70 80 0 70

Heat rate 1 G/MWh 9.0 9.3 10.0 9.3 10.6 10.4 10.4

Heat rate 2 G/MWh 8.2 8.5 9.1 8.5 9.7 9.4 9.4

Ramp-up charge CNY/MW 132

Ramp-down charge CNY/MW 132

FO&M charge CNY/kW/year 265

VO&M charge CNY/MWh 66

Maintenance rate % 13

Forced outage rate % 13

Mean time to repair h 336

Parameter Unit Existing coal Convert coal CCGT OCGT ICE

Efficiency % 36.6 37 55 33 46

Start-up cost CNY/MW/start 927 861 397 265 0

Start-up time min 180 60 45 10 2

Investment cost CNY/kW 0 397 2979 3310 3641

Lifetime years 20

Table 1. Existing power plant parameters (source: Jiangsu grid)

Table 2. Comparison of different candidate technologies

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 11

Learning curve of RES and batteries

According to Bloomberg New Energy Finance (BNEF) research, the cost of

renewables and battery storage solutions will continue to drop both in China and

around the world, making RES more competitive and increasing demand for

flexibility.

Figure 10.1. RES pricing forecast

(source: BNEF 2019)

Figure 10.2. Batteries pricing

forecast (source: BNEF 2019)

0

500

150

200

250

300

350

400

450

100

CNY/

MW

h

50

Figure 12. Pricing forecast of RES and batteries (BNEF 2019)

Wind Solar

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

0

10000

3000

4000

5000

6000

7000

8000

9000

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CNY/

kW

1000

Battery pricing forecast 4hrs

Battery 4hrs

2029

2039

2033

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2025

2023

2021

2019

2017

0

500

150

200

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300

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100

CNY/

MW

h

50

Figure 12. Pricing forecast of RES and batteries (BNEF 2019)

Wind Solar

2024

2030

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2021

2020

2019

2018

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Battery 4hrs

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2019

2017

12 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

IV. POWER SYSTEM MODELLING RESULTS

BASELINE (LOW RES):

Total installed capacity will reach 248 GW in 2030.

Share of renewables

Wind plus solar is 54 GW, accounting for 21.8% of the total installed capacity.

MODERATE RES

Total installed capacity will reach 292 GW in 2030.

Share of renewables

Wind plus solar is 102.3 GW, accounting for 35% of the total installed capacity.

HIGH RES

Total installed capacity will reach 340 GW in 2030.

Share of renewables

Wind plus solar is 162.4 GW, accounting for 47.8% of the total installed capacity.

Figure 11. Power system

modelling results

0

100%

40%

30%

20%

10%

50%

60%

70%

80%

90%

0

350

50

100

150

200

250

300G

W

Power system modelling results

2030High RES

2030Moderate RES

2030Baseline

2018

CCGT WindCoal SolarNuclearBattery

OCGT ICEHydroPeak load

2030High RES

2030Moderate RES

2030Baseline

2018

CCGT WindCoal SolarNuclearBattery

OCGT ICEHydroPeak load

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 13

COMPARISON OF THE THREE SCENARIOS

The figure below presents a comparison of the total installed capacity and

structure of different types of power systems in Jiangsu in 2030 under the different

scenarios.

In terms of fossil energy, as installed coal-fired power capacity remains

unchanged, the proportion will continue to decline from more than 60% in 2018

to about 20–30% in 2030. The proportion of installed natural gas (including non-

peaking gas turbines, peaking gas turbines and flexible ICE power plants) varies

greatly between the scenarios. In terms of non-fossil energy, nuclear power and

pumped hydro storage capacity will not change, while wind and solar installed

capacity will increase significantly according to the modelling scenarios. The

proportion of installed non-fossil power capacity reaches 30% in the baseline

scenario, 45% in the moderate RES scenario and 56% in the high RES scenario

compared to 23.6% in 2018.

Figure 12. Comparison of total

installed capacity and structure of

different types of power systems

0

100%

40%

30%

20%

10%

50%

60%

70%

80%

90%

0

350

50

100

150

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250

300

GW

Power system modelling results

2030High RES

2030Moderate RES

2030Baseline

2018

CCGT WindCoal SolarNuclearBattery

OCGT ICEHydroPeak load

2030High RES

2030Moderate RES

2030Baseline

2018

CCGT WindCoal SolarNuclearBattery

OCGT ICEHydroPeak load

14 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

V. RECOMMENDATIONS AND BENEFITS

RECOMMENDATIONS

In the context of large-scale integration of renewable energy, the future demand

for electricity and the need for reliable system operation can be met by:

• Building and integrating large-scale renewable energy capacity into the

power system to enable a lower system cost and more sustainable energy

generation

• Maintaining, and increasing the flexibility of, remaining coal-fired plants in line

with the reduction/equal-coal policy

• Adding flexible power generation solutions for renewables integration and

balancing, including efficient gas-fired ICE power plants and battery energy

storage

• Adding required peaking capacity, including gas-fired ICE power plants, gas

turbines and battery energy storage

Power generation from non-fossil fuels by type, 2019–2030

By 2030 the installed capacity of flexible power sources including peaking gas

turbines, pumped hydro storage power stations and ICE power plants will reach

58 GW in the baseline scenario, 56.9 GW in the moderate RES scenario and 55.7

GW in the high RES scenario, accounting for 23, 19 and 16% of the total installed

capacity respectively.

Share of renewables in the future system

According to the results of the load forecast, Jiangsu’s electricity consumption

will reach 905 TWh in 2030. The proportion of imported electricity will remain

at around 26%, and nuclear power generation will account for about 3%. The

proportion of wind and solar power generation will increase from 4% in 2018

to 11%, 20% and 30% in 2030 under the baseline, moderate and high RES

scenarios respectively. The proportion of fossil fuel power generation will decline

from 72% in 2018 to 60% in the baseline scenario, 51% in the moderate RES

scenario and 41% in the high RES scenario by 2030. Figures 13.1–13.3 below

show the power generation structure for each scenario for the period 2018–2030.

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 15

Figure 13.1. Power generation

structure for baseline scenario,

2018–2030

Figure 13.2. Power generation

structure for moderate RES

scenario, 2018–2030

0%

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Power generation structure S1

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Gas WindCoal SolarNuclear ImportsHydro

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Power generation structure S2

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Gas WindCoal SolarNuclear ImportsHydro

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Power generation structure S3

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Gas WindCoal SolarNuclear ImportsHydro

16 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

Electric Power Planning & Engineering Institute (EPPEI)

Established in 1954 as a national consultation institution, EPPEI mainly provides

services to the Chinese government, financial institutions, the power industry and

relevant enterprises. EPPEI is qualified by the National Development and Reform

Commission (NDRC) to conduct the evaluation of electric power projects across

China.

EPPEI has issued the following policy suggestions:

• Undertake flexibility retrofits of existing coal-fired power units and take

advantage of peak regulation potential with minimal marginal cost.

• Explore the construction of various types of natural gas power station for

peak regulation including introducing flexible ICE power plants to supplement

traditional gas turbine power stations.

• Strengthen inter-provincial and inter-regional power interconnection to

increase clean energy transmission. Optimise the power transmission curve

with improved short-term RES prediction to strengthen peak adaptability.

• Unlock the potential of demand-side response resources to mitigate the

challenge presented by large-scale integration of RES in the power system.

• Accelerate spot market construction to ensure the priority of renewable

energy in a competitive market to generate power and unleash the potential

of system flexibility through floating electricity prices.

• Improve the auxiliary services market mechanism and fully mobilise power

generation enterprises to participate in providing flexibility with reasonable

payback.

Figure 13.2. Power generation

structure for high RES scenario,

2018–2030

0%

100%

30%

40%

50%

60%

70%

80%

90%

20%

10%

Power generation structure S1

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Gas WindCoal SolarNuclear ImportsHydro

0%

100%

30%

40%

50%

60%

70%

80%

90%

20%

10%

Power generation structure S2

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Gas WindCoal SolarNuclear ImportsHydro

0%

100%

30%

40%

50%

60%

70%

80%

90%

20%

10%

Power generation structure S3

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Gas WindCoal SolarNuclear ImportsHydro

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 17

BENEFITS Significant economic benefits can be achieved through the comprehensive

application of peaking power supplies and large-scale renewable energy. The

average power cost based on the power generation system is shown in figure 14

below.

By 2030, because of the large-scale use of cheap renewable energy, the high

RES scenario shows an average power cost that is 2% lower than in the baseline

(low RES) scenario. If the comparison is made year on year, the accumulated cost

of the high RES scenario is CNY 64 billion lower than in the baseline scenario.

Figure 14. Average power cost

based on the power generation

system (CNY/kWh)

Figure 15. Annual and cumulative

savings based on the high RES

scenario

0.30

0.40

0.36

CNY/

kWh

0.38

0.34

0.32

Average power cost

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Moderate RESBaseline (low RES) High RES

0

80

30Trilli

on C

NY

40

50

60

70

20

10

LCOE

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Cumulative savingAnnual saving

0.30

0.40

0.36

CNY/

kWh

0.38

0.34

0.32

Average power cost

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Moderate RESBaseline (low RES) High RES

0

80

30Trilli

on C

NY

40

50

60

70

20

10

LCOE

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

2018

Cumulative savingAnnual saving

18 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

Reduced levelised cost of electricity (LCOE)

To further analyse the cost difference between the high RES and baseline (low

RES) scenarios, the following cost savings are achieved. These costs are divided

into operational costs (OPEX, consisting mainly of fuel costs and variable costs)

fixed operations and maintenance costs (FOM), and capital costs (CAPEX).

Investment expenditures increase significantly with the deployment of large-scale

renewable energy. However, due to the lower marginal cost of renewable energy

and the need for much less fossil fuel, the operational expenses decrease, and

the flexibility of power supply improves the system’s ability to adjust, resulting in

lower operating costs. This means that between 2020 and 2030 the total cost of

the power generation system can be reduced by nearly CNY 64 billion, bringing

considerable economic benefit.

Figure 16. Savings based on the

high RES scenario (billion CNY)

200

500

350

Milli

on to

ns

400

450

300

250

Total carbon emissions results

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

-400

400

-100

Billio

n CN

YSa

vings

Addi

dtio

nal c

osts

0

100

200

300

-200

-300

Savings

OPEX FOM CAPEX SUM

Moderate RESBaseline (low RES) High RES

200

700

650

600

350

g/kW

h

400

550

500

450

300

250

Carbon emission intensity results

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

Moderate RESBaseline (low RES) High RES

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 19

Reduced emissions and fossil fuel power generation

The graphs below show the year-on-year comparison of total carbon

emissions and carbon emission intensity under the three different scenarios.

Compared with the baseline (low RES) scenario, total carbon emissions are

reduced by more than 25% and carbon emission intensity is reduced by more

than 45% under the high RES scenario.

In general, by 2030, with the increase in the proportion of renewable energy, the

amount of power generated by fossil energy will decrease accordingly. Figures

18.1 and 18.2 below are a schematic diagrams of the change in installed power

generation capacity of fossil fuels.

Figure 17.1. Year-on-year

comparison of total carbon

emissions (million tons) for the

three scenarios

Figure 17.2. Year-on-year

comparison of carbon emission

intensity (g/kWh) for the three

scenarios

200

500

350

Milli

on to

ns

400

450

300

250

Total carbon emissions results

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

-400

400

-100Bi

llion

CNY

Savin

gsAd

didt

iona

l cos

ts

0

100

200

300

-200

-300

Savings

OPEX FOM CAPEX SUM

Moderate RESBaseline (low RES) High RES

200

700

650

600

350

g/kW

h

400

550

500

450

300

250

Carbon emission intensity results

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

Moderate RESBaseline (low RES) High RES

200

500

350

Milli

on to

ns

400

450

300

250

Total carbon emissions results

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

-400

400

-100

Billio

n CN

YSa

vings

Addi

dtio

nal c

osts

0

100

200

300

-200

-300

Savings

OPEX FOM CAPEX SUM

Moderate RESBaseline (low RES) High RES

200

700

650

600

350

g/kW

h

400

550

500

450

300

250

Carbon emission intensity results

2024

2030

2026

2027

2028

2029

2025

2023

2022

2021

2020

2019

Moderate RESBaseline (low RES) High RES

20 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

Under the three scenarios, coal power will remain the main component of the

power generation structure and continue to play a key role in guaranteeing base

load. When the proportion of renewable energy increases, natural gas power will

play a larger role in peaking, so the utilisation hours of gas power will be reduced

as they move from baseload and mid-merit towards more peaking applications.

Figure 18.1. Changes in fossil

energy power generation, gas

(TWh)

Figure 18.2. Changes in fossil

energy power generation, coal

(TWh)

200

500

350TWh

400

450

300

250

Changes in fossil energy power generation (TWh)

0

80

30

TWh

40

70

60

50

20

10

Moderate RESBaseline (low RES) High RES

2018 2030

Moderate RESBaseline (low RES) High RES

2018 2030

200

500

350TWh

400

450

300

250

Changes in fossil energy power generation (TWh)

0

80

30

TWh

40

70

60

50

20

10

Moderate RESBaseline (low RES) High RES

2018 2030

Moderate RESBaseline (low RES) High RES

2018 2030

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 21

By 2030, the annual utilisation hours of coal-fired generation units will be 4,224

hours in the high RES scenario, 5,215 hours in the moderate RES scenario and

5,995 hours in the baseline (low RES) scenario. The utilisation hours of the gas

generation units will be 641 hours, 817 hours and 1,085 hours respectively.

Figure 19.1. Change in annual

utilisation hours, gas

Figure 19.2. Change in annual

utilisation hours, coal

0

600

6000

2400

Aver

age

runn

ing

hour

s

3000

4200

4800

5400

3600

1800

1200

Change in annual utilisation hours

0

4000

1500

Aver

age

runn

ing

hour

s

2000

3500

3000

2500

1000

500

Moderate RESBaseline (low RES) High RES

2018 2030

Moderate RESBaseline (low RES) High RES

2018 2030

0

600

6000

2400

Aver

age

runn

ing

hour

s

3000

4200

4800

5400

3600

1800

1200

Change in annual utilisation hours

0

4000

1500

Aver

age

runn

ing

hour

s

2000

3500

3000

2500

1000

500

Moderate RESBaseline (low RES) High RES

2018 2030

Moderate RESBaseline (low RES) High RES

2018 2030

22 White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020

VI. CONCLUSION

Power demand in Jiangsu province can be effectively satisfied and system

reliability achieved by:

• scaling up renewable energy ambitions

• building and integrating large-scale renewable energy capacity into the power

system

• maintaining the existing coal power capacity with optional flexibility retrofits

• integrating multiple flexible power solutions such as gas internal combustion

engines, and battery energy storage

With the increase of renewable energy, the amount of fossil power generation

decreases accordingly. Coal power will be used for baseload while gas power will

mainly provide peak regulation, meaning the utilisation hours of gas power will

be reduced as they move from baseload and mid-merit towards more peaking

applications.

Although coal-fired plants, combined cycle gas turbines and ICE power plants

can provide flexibility in varying degrees, the fast response of ICE plants (within 2

minutes) offer superior balancing and short-term rapid response for variable wind

and solar.

Increasing renewable energy integration will contribute to significantly lower

system costs. In the high RES scenario non-fossil generation will reach nearly

50%, carbon emissions will peak before 2030 and carbon intensity will drop by

about 45%.

BENEFITS OF THE HIGH RES SCENARIO IN 2030 WITH FULL UTILISATION OF RENEWABLES

CNY 64 BILLION

ACCUMULATED SAVINGS

45% REDUCTION IN CARBON

EMISSIONS INTENSITY

1,771 HOUR REDUCTION IN

UTILISATION HOURS OF

COAL FIRED GENERATING UNITS

White paper on power system optimisation | The path towards a future of high renewable energy in Jiangsu, China | 2020 23

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04/2021 / Tenfour