The Health and Climate Benefits of Economic Dispatch in China's Power System

China's power system is highly regulated and uses an equal-share dispatch approach. However, market mechanisms are being introduced to reduce generation costs and improve system reliability. Here, we quantify the climate and human health impacts brought about by this transition, modeling China's power system operations under economic dispatch. We find that significant reductions in mortality related to air pollution (11%) and CO2 emissions (3%) from the power sector can be attained by economic dispatch, relative to the equal-share approach, through more efficient coal-powered generation. Additional health and climate benefits can be achieved by incorporating emission externalities in electricity generation costs. However, the benefits of the transition to economic dispatch will be unevenly distributed across China and may lead to increased health damage in some regions. Our results show the potential of dispatch decision-making in electricity generation to mitigate the negative impacts of power plant emissions with existing facilities in China.

Automated summary

China's regulated power system is transitioning towards market mechanisms to reduce costs and improve reliability. By modeling power system operations under economic dispatch, significant reductions in mortality related to air pollution and CO2 emissions can be achieved through more efficient coal-powered generation. Incorporating emission externalities in electricity generation costs can further enhance health and climate benefits. However, the transition may lead to unevenly distributed impacts across China.