⚡️Well, here is...China's much-awaited coal capacity compensation mechanism has finally been announced and will take effect from Jan 1, 2024. Basically, this is a scheme to allow coal fired generators that aren't being used enough to earn a paycheck just for being available. 🧵
This is very relevant for the Chinese coal fleet, which saw an average utilization rate of less than 50% last year (and dropping). Without this capacity mechanism, many plants would be unable to make money and shut down, making them unavailable for when they ARE needed.
@pretentiouswhat Are there incentives for less poluting coal generators in this scheme, so in future the most poluting will be pushed out first?
@pretentiouswhat Thanks for the summary. Do you know if there is any mechanism to tie these costs to generation source? So that buying clean electricity is cheaper than buying coal elec? Something to incentivize clean generation or firming?
@pretentiouswhat would be interesting if they incorporated some kind of CO2 efficiency, requirements for CCUS or something to also improve the pollution level requirements by shutting down old inefficient plants