energies Article The Strategies for Improving Energy Efficiency of Power System with Increasing Share of Wind Power in China Jun Zhao 1,* and Bo Shen 2 1 School of Humanities and Social Sciences, North China Electric Power University, Beijing 102206, China 2 Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA; [email protected] * Correspondence: [email protected] Received: 2 May 2019; Accepted: 18 June 2019; Published: 20 June 2019 Abstract: Coal-fired power generation will dominate the electricity supply in China in the foreseeable future. Coal fired power units can play a crucial role in integrating intermittent wind energy and improving the overall energy efficiency of the power system. The integration benefits of wind power, along with the gains of high load rates of coal fired units, should be fully taken into account. An optimal model combining wind power and coal fired units is built to analyze the operational flexibility of coal fired units and the integration of wind power. Taking the coal fired units in North China Power Grid as an example, the dispatch costs and benefits are examined under the energy efficiency dispatch mode, in comparison with those under the fair dispatch rules and the installed capacity. The results show that increasing the flexibility of the power system under the energy efficiency dispatch mode may be the best choice for the power system with the high share of coal fired units to integrate more wind power, and that the units delivering flexibility services are financially influenced. The results also indicate that a certain amount of wind power curtailment may be reasonable, and that rational penalty rate and fees for the curtailment of wind power may help to optimize the operation of the power system and integrate more wind power. Based on these results, policy and strategy recommendations are proposed to promote the flexibility of coal fired units and change their operation mode and their dispatch mode in the power system. Keywords: coal fired power generation; operational flexibility; cycling; peak-regulation optimization; renewable energy; policy recommendations 1. Introduction In response to climate change, economic, and environmental challenges, the Paris Agreement is an important milestone against the global warming. Many countries have begun to deploy renewable energy (RE, mainly wind and solar energy) and low carbon energy technologies towards a more sustainable power supply, and high shares of RE have become a focus around the world [1,2]. Because of the coal-based energy endowment, China’s power industry is facing huge challenges [3]. China targets to increase the proportion of non-fossil energy to 15% in 2020, and 20% in 2030, and the CO2 intensity of GDP will be lowered by 60–65% by 2030, in comparison with that in 2005 [4]. China is not alone in the energy system transition as other countries (e.g., Germany, USA, Australia, etc.) with high proportion of coal power generation pursue their own energy targets, and the paths these countries have taken may vary because of their energy mix, RE resources, and political and social setting [5]. These countries are still relying on coal for the bulk of their power generation, and their shares of electricity generation by fuel sources in 2016 [6] are shown in Figure1. Hydropower and Gas-fired power stations are usually regarded as peak regulation sources or flexibility sources Energies 2019, 12, 2376; doi:10.3390/en12122376 www.mdpi.com/journal/energies Energies 2019, 12, x FOR PEER REVIEW 2 of 33 Energies 2019, 12, 2376 2 of 22 Hydropower and Gas-fired power stations are usually regarded as peak regulation sources or toflexibility integrate sources renewable to integrate energy, butrenewable hydroelectric energy, generation but hydroelectric is affected generation by the environment, is affected seasons, by the etc.environment, [7], and the seasons, capacity etc. share[7], an ofd the pumped-hydro capacity share energy of pumped-hyd storage stationsro energy is lessstorage than stations 9 percent is less of overallthan 9 percent hydroelectric of overall generation hydroelectric capacity generation in China ca [8].pacity Hydroelectric in China [8]. generation Hydroelectric is also generation clean energy is andalso isclean always energy granted and priority is always dispatch. granted All priority these factors dispatch. affect All the flexibilitythese factor servicess affect provided the flexibility by the hydroelectricservices provided power by units. the hydroelectric China lacks flexibility power un sourcesits. China for renewable lacks flexibility energy sources integration, for renewable which are availableenergy integration, in other countries which are with ava highilable share in other ofrenewable countries with energy. high share of renewable energy. Figure 1. Shares of electricity generation by sources. Figure 1. Shares of electricity generation by sources. Although the shares of RE are also increasing steadily in China, coal-fired power generation still dominatesAlthough the electricitythe shares supply of RE and are willalso be increasing expected tosteadily be so forin theChina, foreseeable coal-fired future. power By generation the end of 2017,still dominates the capacity the of electricity coal fired supply power unitsand will was be about expe 981.3cted Gigawattsto be so for (GW), the fo accountingreseeable future. for more By than the 55end percent of 2017, of the the capacity total generation of coal fired capacity, power and units it generated was about 4149.8 981.3 Terawatt-hours Gigawatts (GW), (TWh), accounting accounting for formore almost than 6555 percentpercent ofof thethe totaltotal powergeneration output capa [9].city, With and the it cumulativegenerated 4149.8 wind powerTerawatt-hours capacity of(TWh), 163.3 GWaccounting and the for solar almost photovoltaic 65 percent (PV) of capacity the total of powe 129.4r GWoutput in 2017, [9]. With they generated,the cumulative respectively, wind power 303.4 TWhcapacity and of 116.6 163.3 TWh, GW accounting and the solar for 4.73%photovoltaic and 1.82% (PV) of totalcapacity electricity of 129.4 generation GW in 2017, [9]. Accordingthey generated, to the requirementsrespectively, referred303.4 TWh in Opinions and 116.6 on Further TWh, Deepeningaccounting the Reformfor 4.73% of Power and System1.82% [10of], total China’s electricity electric powergeneration system [9]. in According the future shouldto the requirements be a combination referred of conventional in Opinionspower on Further generation, Deepening centralized the Reform and of distributedPower System renewable [10], China's energy, electric and would power run insystem the mode in the where future types should of energy be area complementary,combination of andconventional are transmitted power over generation, a long distance centralized by power and di gridstributed along withrenewable the local energy, consumption and would by microgrid,run in the ensuingmode where that renewabletypes of energy energy are could complementary, be exploited and to theare transmitted outmost extend over anda long the distance energy ebyffi ciencypower significantlygrid along with be improved. the local consumption by microgrid, ensuing that renewable energy could be exploitedThe expansion to the outmost of RE extend will increase and the the ener operationgy efficiency complexity significantly of the power be improved. system and has an effect on theThe dispatch expansion mode of ofRE the will power increase system the andoperatio then operation complexity way of of the the power conventional system and generation has an unitseffect [11on]. the Given dispatch the variable, mode unpredictableof the power characteristics system and the of RE, operation more RE way integration of the increasesconventional the requirementsgeneration units of the[11]. flexibility Given the sources variable, to balance unpredictable their variances, characteristics and these of RE, flexibility more RE requirements integration haveincreases to be the imposed requirements on the overall of the powerflexibility system. sources to balance their variances, and these flexibility requirementsThe flexibility have canto be be imposed defined on as the overall ability ofpower a power system. system to rapidly response to the power changesThe inflexibility demand can and be supply, defined and as itsthe evolution ability of isa power driven system by the increaseto rapidly of response RE integration to the power in the powerchanges system in demand [12]. The and potential supply, and flexibility its evolution sources is usually driven include by the electricityincrease of storage RE integration units, demand in the sidepower management, system [12]. cross-borderThe potential energyflexibility trading, sources hydro usually power include units, electricity and the storage flexible units, operation demand of thermalside management, power units, cross-border etc. [7,13]. The energy capacity trading, shares hy ofdro units power by fuel units, sources and in the the flexible regional operation power grids of inthermal 2017 [ 8power,9] are units, shown etc. in Figure[7,13]. 2Th. Thee capacity flexibility shares sources of units include by thefuel gas sources fired units,in the pumped-hydroregional power energygrids in storage 2017 stations[8,9] are and shown hydro in power Figure stations 2. The with flexibility reservoirs. sources In the northerninclude regionsthe gas of fired China units, with aboutpumped-hydro nearly 69% energy of RE capacities,storage stations there isand a shortage hydro