Cost-effectiveness uncertainty may bias the decision of coal power transitions in China

Abstract

AbstractA transition away from coal power always maintains a high level of complexity as there are several overlapping considerations such as technical feasibility, economic costs, and environmental and health impacts. Here, we explore the cost-effectiveness uncertainty brought by policy implementation disturbances of different coal power phaseout and new-built strategies (i.e., the disruption of phaseout priority) in China based on a developed unit-level uncertainty assessment framework. We reveal the opportunity and risk of coal transition decisions by employing preference analysis. We find that, the uncertainty of a policy implementation might lead to potential delays in yielding the initial positive annual net benefits. For example, a delay of six years might occur when implementing the prior phaseout practice. A certain level of risk remains in the implementation of the phaseout policy, as not all strategies can guarantee the cumulative positive net benefits from 2018–2060. Since the unit-level heterogeneities shape diverse orientation of the phaseout, the decision-making preferences would remarkably alter the selection of a coal power transition strategy. More strikingly, the cost-effectiveness uncertainty might lead to missed opportunities in identifying an optimal strategy. Our results highlight the importance of minimizing the policy implementation disturbance, which helps mitigate the risk of negative benefits and strengthen the practicality of phaseout decisions.