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Recent policy in China targets an increase in the contribution of natural gas to the nation's energy supply. Historically, China's natural gas prices have been highly regulated with a goal to protect consumers. The old pricing regime failed to provide enough incentives for natural gas suppliers, which often resulted in natural gas shortage. A new gas pricing reform was tested in Guangdong and Guangxi...
We analyzed the changes necessary to increase the share of natural gas in China's electricity mix, currently at 2%. The competitiveness of natural gas generation relative to coal generation depends on three factors: the price of natural gas relative to coal; the capital cost of natural gas power plants relative to coal power plants; and a carbon price. We modeled how changes in these factors would...
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