Optimizing the Provincial Target Allocation Scheme of Renewable Portfolio Standards in China

Renewable portfolio standards (RPS) is widely regarded as a useful policy tool to steer energy transition. China government has recently released an RPS target allocation scheme to help promote its renewable electricity consumption. Formulating an efficient and equitable RPS target allocation scheme is a vital step to ensure the effectiveness of RPS. In this paper we argue that data envelopment analysis (DEA) can be used to optimize the provincial RPS targets in China from an efficiency perspective. We first evaluate the efficiency of the officially released RPS target allocation scheme and then apply a zero-sum gains DEA model to optimize the scheme. The results indicate that the official scheme suffers the efficiency loss. Compared with the provincial RPS targets in the optimized scheme, the official non-hydro RPS targets are all set low while the official hydro-included RPS targets are all set high. Moreover, the equity of the official scheme and the optimized scheme is investigated by the Gini coefficient, which further verifies the merits of the optimized scheme in equity