Impact of Carbon Emission Trading and Renewable Energy Development Policy on the Sustainability of Electricity Market : A Stackelberg Game Analysis

Optimizing the electrical structure and realizing sustainable development are the key points of electricity market. China has introduced renewable energy development policy on the basis of carbon emission trading (CET), including feed-in premium (FIP), renewable portfolio standard (RPS) and its accompanying green certificate trading mechanism. Faced with the dual pressures of environment and green energy, how to effectively formulate policies is a major problem that needs to be solved urgently. Accordingly, this paper aims to establish a stackelberg game model of electricity market under the two types of mixed policy scenarios of CET-FIP and CET-RPS, and compared the influence of different combination policies on the development of renewable energy industry. The results show that: (1) Compared with a single renewable energy development policy, CET-RPS and CET-FIP policies can effectively reduce carbon emission. (2) In the long run, the CET-RPS policy has a stronger ability to reduce emissions, and the CET-FIP policy has stronger economic benefits. (3) In the early stage of renewable energy development, the electricity generation, and profit of power generation company and social welfare are higher under the CET-RPS policy, while in the mature stage of renewable energy development, these important performance indices become better under the CET-FIP policy. (4) Under the CET-RPS policy, the increase of carbon price will lead to the increase of on-grid price and the decrease of green certificate price; while under the CET-FIP policy, the increase of carbon price will lead to the increase of on-grid price and the premium subsidy