- Joint Program Report
Computable general equilibrium (CGE) models seeking to evaluate the impacts of electricity policy face difficulties incorporating detail on the variable nature of renewable energy resources. To improve the accuracy of modeling renewable energy and climate policies, detailed scientific and engineering data are used to inform the parameterization of wind electricity in a new regional CGE model of China. Wind power density (WPD) in China is constructed using boundary layer flux data from the Modern Era Retrospective-analysis for Research and Applications (MERRA) dataset with a 0.5° latitude by 0.67° longitude spatial resolution. Wind resource data are used to generate production cost functions for wind at the provincial level for both onshore and offshore, incorporating technological parameters and geographical constraints. By using these updated wind production cost data to parameterize the wind electricity option in a CGE model, an illustrative policy analysis of the current feed-in tariff (FIT) for onshore wind electricity is performed. Assuming a generous penetration rate, no grid integration cost and no interprovincial interconnection, we find that the economic potential of wind exceeds China’s 2020 wind target by a large margin. Our analysis shows how wind electricity resource can be differentiated based on location and quality in a CGE model and then applied to analyze climate and energy policies.