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Biomass co-firing technology is a potential solution for low-carbon transition of coal-fired power plants. Existing techno-economic analyses of this technology fail to consider indirect benefits, such as avoided losses from technology retrofitting, and the heterogeneity across regions. To address these limitations, we developed five types of techno-economic indicators to analyze six possible future scenarios for the application of this technology in 29 provinces of China, based on regional heterogeneous data. The results show, first, generally, the higher the local coal price, the local on-grid electricity price, the biomass feed-in tariff subsidy, and the carbon trading price, the greater the incentives and benefits for biomass co-firing. Second, bio-electricity tariff subsidies greatly increase the incentives for technology retrofitting, with 26 of the 29 provinces analyzed having sufficient incentives for retrofits in this scenario. Third, biomass co-firing technology has more revenue potential when emission quota is limited than when it's not. Our results indicate that a timely tightening of the CO2 emission quotas of the coal power sector will stimulate technological retrofits even without additional policy incentives, while more plants retrofitted will achieve positive returns with additional incentives.
Zhang et al. (Sun,) studied this question.