国际能源署-加强中国的ETS以实现碳中和：关注电力行业英

EnhancingChina’sETSforCarbonNeutrality:ectorCo-ordinatingclimateandrenewableenergypolicyAGENCYTheIEAexaminesthefullspectrumofenergyissuesincludingoil,gasandcoalsupplyanddemand,renewableenergytechnologies,electricitymarkets,energyefficiency,accesstoenergy,demandsidemanagementandmuchmore.Throughitswork,theIEAadvocatespoliciesthatwillenhancethereliability,affordabilityandsustainabilityofenergyinits31membercountries,10associationcountriesandbeyond.Pleasenotethatthispublicationissubjecttospecificrestrictionsthatlimititsuseanddistribution.Thetermsandconditionsareavailableonline/t&c/Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.IEAmembercountries:AustraliaAustriaBelgiumCanadaCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanoreaLithuaniaLuxembourgMexicoNetherlandsNewZealandNorwayPolandPortugalSlovakRepublicSpainSwedenSwitzerlandTurkeyUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEAIEAassociationcountries:ArgentinazilChinaEgyptIndiaIndonesiaMoroccoSingaporeSouthAfricaThailandSource:IEA.Allrightsreserved.InternationalEnergyAgencyWebsite:tsinghuaUniversityEnvironmentandEconomyTsinghuaUniversityE),establishedin1980,isaninterdisciplinaryresearchandeducationinstituteatTsinghua.Theinstitute'smissionistocreate,developanddisseminatetheknowledgeideas,andmethodologiescrucialforbuildingsustainableenergysystemsmitigatinglimatechangemitigationforChinaandtheworld.cusareaincludesEnergyandclimatechangemodelingEnergystrategyandplanningandnmentaltionforternationalcooperationtomitigateclimateangeAsanimportantthinktankforenergyandclimatechangeresearch,theinstitutehasbeenntinuouslyprovidingpolicyadvisoryservicestotheNationalDevelopmentandReformCommission(NDRC),theMinistryofEcologyandEnvironment(MEE),andtheNationalEnergyAdministration(NEA).Theinstitutehaslong-timecollaborationswithprestigiousuniversitiesandinternationalorganizationsAbstracthancingChinasETSforCarbonNeutralityAbstractonPowerSectorIEA.IEA.Allrightsreserved.PAGE|4AbstractThepaceofemissionsreductionsofthePeople’sRepublicofChina(hereinafter,“China”)overthecomingdecadeswillbeanimportantfactoringlobaleffortstolimitglobalwarmingto1.5°C.ThepowersectoriscentraltoachievingChina’sstatedclimateambitionofpeakingCO2emissionsbefore2030andachievingcarbonneutralitybefore2060.Acceleratingthesector’sdecarbonisationrequiresawell-coordinatedpolicymix.Thisreport,EnhancingChina'sETSforCarbonNeutrality:FocusonPowerSector,respondstotheChinesegovernment’ssynergiesacrossenergyandclimatepolicies.ItshowsthatanenhancedETScouldleadtheelectricitysectortowardanemissionstrajectorythatisinlinewithChina’scarbonneutralitytarget.ThisreportalsoexplorestheinteractionsandeffectsofChina’snationalETSwithitsrenewableenergypolicyintheelectricitysector,namelyrenewableportfoliostandards(RPS).ItexaminestheimpactofdifferentEnhancedETSScenariosonCO2emissions,generationmix,nteractionwithRPSThereportconcludeswithaseriesofpolicyinsightstoinformChina’sclimateandenergydebate.Acknowledgements,contributorscreditshancingChinasETSAcknowledgements,contributorscreditsonPowerSectorIEA.IEA.Allrightsreserved.PAGE|5Acknowledgements,contributorsandcreditsEnhancingChina'sETSforCarbonNeutrality:FocusonPowerSectorisajointanalysispreparedbytheEnvironmentandClimateChangeUnit(ECC)inthevisionEEDoftheInternationalEnergyAgencyIEAandtheInstituteofEnergy,EnvironmentandEconomy(3E)ofTsinghuaUniversity.DavidFischer(IEA),XiushanChen(IEA)andDaZhang(Tsinghua)co-ordinatedInsaHandschuchfromtheIEA,andDaZhangandHongyuZhangfromtheTsinghua3EInstitute.XiliangZhang,DirectoroftheTsinghua3EInstitute,providedinvaluableguidancetotheprojectandanalysis.FengquanAn,SeniorChinaAdvisorattheIEA,SaraMoarif,UnitHeadofECC,andTomHowes,DivisionHeadofEEDprovidedvaluablefeedbackandoverallguidancetotheproject.IEAandTsinghuacolleagues:HuilinLuo,LucaLoRe,BrittaLabuhn,ErmiMiao,RebeccaMcKimm,BiqingYang,PaoloFrankl,CésarAlejandroHernández,JacquesWarichet,BrentWanner,DanielWetzel,YasmineArsalane,AraceliFernándezPales,UweRemme,SimonBennett,PeterFraserandHengLiang.Programme.WewouldliketoextendourgratitudetothefundersoftheCleanEnergyTransitionsProgramme,inparticulartheAgencefrançaisededéveloppement(AFD).Theauthorsarealsogratefulforvaluablecommentsandfeedbackfromexternalexperts,including:AndersHove(GIZ),ChristophBertram(PIKPotsdam),ChristopheDeGouvello(WorldBank),CyrilCassisa(BHP),DavidHone(Shell),YingFan(BeihangUniversity),FredrichKahrl(RAP),MinHu(IGDP),HuwSlater(ICF),JiahaiYuan(NorthChinaElectricPowerUniversity),JiangLin(LBNL),JingjieZhang(CEC),JohannesEnzmann(EuropeanCommission),XueduLu(ADB),MarcoBaroni(BaroniEnergy),MarissaSantikarn(WorldBank),MichaelGrubb(UniversityCollegeLondon),NeilHirst(ImperialCollegeLondon),PengfeiXie(RAP),PeterVis(EuropeanUniversityInstitute),PeterZapfel(EuropeanCommission),PhilipAndrews-Speed(NationalUniversityofSingapore),YanQin(Refinitiv),RachelMok(WorldBank),RobertStowe(HarvardUniversity),WillAcknowledgements,contributorscreditshancingChinasETSAcknowledgements,contributorscreditsonPowerSectorIEA.IEA.Allrightsreserved.PAGE|6Acworth(PollinationGroup),YueDong(EnergyFoundationChina),JunjieZhang(DukeKunshanUniversity)andDechenZhu(ChinaHuadianCorporation).SincerethanksgotoElspethThomsonwhoeditedthereport.TheauthorswouldalsoliketothanktheIEACommunicationsandDigitalOffice(CDO),particularlyAstridDumond,IsabelleNonain-SemelinandThereseWalshforprovidingvaluableeditorialandpublishingsupport.ableofcontentshancingChinasETSforableofcontentsonPowerSectorIEA.IEA.Allrightsreserved.PAGE|7fcontentsExecutivesummary 10Chapter1Policycontext 21Long-termpolicyobjectives 21China’spowersector 22China’sETSdesign 26China’srenewablespolicy 29InteractionbetweenandintegrationofRPSandETS 33Chapter2:Keyfeaturesofthemodelandscenariodesign 37Modeldesign 37Scenariodesign 40Chapter3:Thecurrentpolicymix–RPSandETS 45ResultsoftheRPSScenario 45ResultsoftheRPS-ETSScenario 49Chapter4:EnhancedETSdesignsforcarbonneutrality 56ImpactonCO2emissions 56Impactongenerationmix 59Policycost-effectiveness 60ImpactsofCO2costsontechnologies 65PolicyinteractionsofETSandRPS:impactongreenelectricitypremium 72Chapter5Policyinsights 75Generalannex 79REPOmodelandmodellingdesign 79References 86Abbreviationsandacronyms 91Glossary 91ListoffiguresFigureES.1CO2emissionstrajectoryfromelectricitygenerationbyscenario,2020-2035 14FigureES.2AdditionalemissionsreductionsbychannelintheRPS-ETSandETS+ScenarioscomparedwiththecounterfactualRPSScenario,2025-2035 15FigureES.3Electricitygenerationmixbytechnologyandscenario,2020-2035 17FigureES.4Totalsystemcostsbyscenario,2035 18ableofcontentshancingChinasETSforableofcontentsonPowerSectorlrightsPAGE|8reserved.reserved.Figure1.1ChinaelectricitygenerationandprojectionsintheAnnouncedPledgesScenario,2000-2050 22Figure1.2SchematicillustrationofinteractionbetweenanRPSandanintensity-basedETSfocusingonfossil-basedgeneration 35Figure1.3SchematicillustrationofinteractionbetweenanRPSandacap-and-tradeETS 36Figure3.1ElectricitygenerationandCO2emissionsintheRPSScenario,2020-2035 46Figure3.2CoalpowergenerationandcapacitymixintheRPSScenario,2020-2035 48Figure3.3CO2emissionsfromelectricitygenerationintheRPSandRPS-ETSScenarios, 2020-2035 50Figure3.4ElectricitygenerationbytechnologyintheRPSandRPS-ETSScenarios,2020-2035 51Figure3.5AverageeffectiveCO2costbytechnologyandallowancepriceintheRPS-ETSScenario,2020-2035 52Figure3.6GreenelectricitypremiumintheRPSandRPS-ETSScenarios,2025-2035 54Figure3.7Changeinunitelectricitygenerationcostrelativeto2020intheRPSandRPS-ETSScenarios,2025-2035 55Figure4.1CO2emissionstrajectoryfromelectricitygenerationbyscenario,2020-2035 57Figure4.2EmissionsreductionsbychannelintheRPS-ETSandETS+ScenarioscomparedwiththecounterfactualRPSScenario,2025-2035 58Figure4.3Electricitygenerationmixbytechnologyandscenario,2020-2035 59Figure4.4Totalsystemcostsbyscenario,2035 61Figure4.5Changeinunitelectricitygenerationcostrelativeto2020byscenario,2025-2035 62Figure4.6Allowancepricebyscenario,2020-2035 64Figure4.7AllowancepriceandaverageCO2costsignalbytechnologybyscenario,2035 67Figure4.8Generationcostsbytechnologyandscenario,2035 68Figure4.9Greenelectricitypremiumandnon-hydrorenewablessharebyscenario,2025-2035 73FigureA.1REPOmodelframework 73ListofboxesBox1.1TheimportanceofthepowermarketreformforChina’sETS 25Box1.2TradablePerformanceStandardsandCap-and-TradeSchemes 28Box1.3RPScompanionpolicies:Greencertificatesandgreenpowertrading 32Box4.1ETSandtechnologicalinnovation 64Box4.2PotentialimplicationsforCCERoffsetsinclusion 74ListoftablesTableES.1Keyoutcomesbyscenario,2035 12Table1.1Benchmarkdesignforelectricitygenerationfor2019and2020 27Table2.1DesignofRPSandRPS-ETSScenarios 41Table2.2DesignofdifferentEnhancedETSScenarios 43Table2.3Assumptionsonbenchmarkvaluesfor2020-2035 44TableA.1Chinapowersector’s6gridregionsandREPOmodel’s32provincialareas 80TableA.2Electricitydemandassumptions 82TableA.3Costassumptionsbytechnology 83ableofcontentshancingChinasETSforableofcontentsonPowerSectorIEA.IEA.Allrightsreserved.PAGE|9TableA.4Costassumptionsbystoragetechnology 83TableA.5Coalpriceassumptionsbyarea,2020 84TableA.6Assumptionsonemissionsreductioncostsfromenergyefficiencymeasures 85TableA.7Assumptionsforthenon-hydrorenewablessharetargetundertheRPSpolicy 85mmaryhancingChinasETSforCarbonmmaryonPowerSectorlrightsPAGE|10reserved.reserved.ThestatementbyPresidentXiJinpinginSeptember2020thatthePeople’sRepublicofChina(hereinafter,“China”)will“aimtohaveCO2emissionspeaktimelineforaprofoundtransformationofthecountry’ssocio-economicwillbeanimportantfactoringlobaleffortstolimitglobalwarmingto1.5°C.Thepowersector,responsiblefornearlyhalfofthecountry’senergysectorCO2emissions,1iscentraltoachievingChina’sclimateambition.Policymakersneedeincentivesandmarketstructureswhichensurethatpowersectoractorscancapturethedynamicdevelopmentandrapidcostreductionoflow-carbontechnologies,andimprovethemanagementoftheexistingfleetoffossil-basedgenerationthroughretrofitting,repurposingandretirement.nneutralitygoalrequiresaneffectivelyco-ordinatedpolicymix.ThisreportrespondstotheChinesegovernment’sinvitationtotheIEAtoco-operateoncarbonemissionstradingsystemsETSandsynergiesacrossenergyandclimatepolicies.ItexplorestheinteractionsandeffectsofChina’snationalETSwithitsrenewableThereportdemonstrateshowthepolicymixcouldbebetterco-ordinatedandtowardanemissionstrajectorythatisinlinewithChina’scarbonneutralitytarget.China’snationalETScameintooperationin2021andistheworld’slargestETS,coveringannualpowersectoremissionsofaround4.5GtCO2.Itcurrentlyemploysanintensity-baseddesignwithfreeallocation.Thismeansthatlevelsofcoal-andgas-firedpowerplants(e.g.kWhofelectricitygenerated)andterminedemissionsintensitybenchmarksegingCOkWhcoveringonlycoveredemissionsFouremissionsintensitybenchmarksarecurrentlydefinedinChina’snationalETSforcoal-andgas-firedpowerplants,andaredifferentiatedbasedonfuel,sub-technologyandplantsize.Againstthisbackdrop,thisreportanalysesfivepolicyscenariosfortheelectricitysectorfortoconsistentwithChina’s14thFive-YearPlan(2021-2025)1EnergysectorCO2emissionsincludeCO2emissionsfromfuelcombustionandfromindustrialprocesses.lrightsPAGE|11reserved.reserved.andtheLong-RangeObjectivesthroughtheYear2035(China,StateCouncil,electricitydemandgrowth,exogenoustechnologycostevolutionsandthecurrentRPSpolicyset-uparekeptidenticalacrossallscenarios.TakingintoaccountChina’songoingelectricitymarketreform,allscenariosassumeeconomicdispatchfrom2025–animportantelementtoeffectivelyintegratetheCO2pricesignalinoperational,investmentandconsumptiondecisions.tpolicyTheunterfactualscenariowiththecurrenthydrorenewableswhichisassumedtoincreaseto25.9%in2030and36.0%in2035,butnoemissionscontrolorcarbonpricingpolicy.2ThisscenarioprovidesapointofcomparisonforisolatingandevaluatingETSeffects.TheRPS-ETSScenarioisacurrentpolicyfreeallocationascurrentlyimplemented.Thescenarioassumesmoderatetighteningofallowanceallocationbenchmarksovertime.RPSandRPS-ETSScenario:ETS+Benchmark(BM)Scenariomaintainstheintensity-basedfreeallocationbutwithsignificantlytighterbenchmarks;ETS+AuctionScenariomaintainsintensity-basedallocationwithmoderatemarktighteningandintroducespartialallowanceauctioningandETSCapbasedETStoacap-and-tradesystem.ThethreeETS+ScenariosaredesignedgnedneutralitybeforeAllETSScenariosusethesameemissionstrajectoryoftheIEA’sAnnouncedPledgesScenario(APS)3asinput,anddemonstratetheimpactofpotentialfutureETSdesigns.2Thesharetargetofnon-hydrorenewablesisbasedonChina’sNationalEnergyAdministration’sconsultationdraft(China,NEA,2021a).3AspresentedintheIEA’spublications“AnenergysectorroadmaptocarbonneutralityinChina”and“WorldEnergyOutlook2021”.ThereisnosinglepathwayforenergysectoremissionsconsistentwithChina’sstatedgoalsofachievingapeakinCO2emissionsbefore2030andcarbonneutralitybefore2060.TheAnnouncedPledgesScenario(APS)presentsoneplausiblepathwaytocarbonneutralityinChina’senergysectorinlinewiththecountry’sstatedgoals.“AnenergysectorroadmaptocarbonneutralityinChina”alsoexploresanAcceleratedTransitionScenario(ATS)toassesstheopportunitiesforandimplicationsofafastertransitionthroughenhancedclimatepolicyambitionsandeffortsto2030.mmaryhancingChinasETSforCarbonmmaryonPowerSectorlrightsPAGE|12reserved.reserved.ThetablebelowsummarisesthekeyETSdesignfeaturesandoutcomesofeachscenarioexcludingthehypotheticalcounterfactualscenarioTableES.1Keyoutcomesbyscenario,2035nfeaturesromnfeaturesromAdditionalverAdditionalvernriocosts*withRPSedighteningonIntensity-based;StrongBMtightening;FreeallocationIntensity-based;ModerateBMtightening;PartialauctioningCap-and-Trade;Stringentcap;FreeallocationIncreaseintotalsystemcostsrelativetotheRPSETSScenariorequiredtoachievegivenCO2reductionlevel.**Additionalshareofnon-hydrorenewablesinelectricitygenerationmixrelativetotheRPS-ETSScenario.Electricitysectoremissionspeakbefore2030withcurrentRPSandETSpoliciesImplementationoftheRPS-ETSScenariocanalmosttripleCO2emissionsreductionsby2035relativeto2020comparedtoanRPSonlyscenario.tandemtosuccessfullypeakandreduceabsoluteCOemissionsfromtheelectricitysector.Thetwopoliciesactondifferentpowerrceswithlimitedoverlapsdeliveringemissionsreductionsthatarecomplementary.Theintensity-basedETSenhancestheefficiencyoftheexistingcoalpowertargetingaround36%ofnon-hydrorenewablesinthegenerationmixby2035,drivessignificantnewcapacityadditionsfrommainlyvariablerenewableenergyswindandsolarPVAnintensitybasedETSwithgraduallytighteningbenchmarkscoveringcoalandgas(RPS-ETSScenario)driveshighercoalfleetefficiency,includingthroughincentivisingretrofitsandashiftincoalpowergenerationtothemostefficientplants.Italsosupportscurbingnewadditionsofunabatedcoalinfavourofcarboncapture,utilisationandstorage(CCUS)technologydeployment.However,thecurrentETSdesignprovidesverymmaryhancingChinasETSforCarbonmmaryonPowerSectorlrightsPAGE|13reserved.reserved.doesnotleadtoadditionalrenewablesdeployment.ybasedETSdesignwithfreeallowanceallocationcurrentlyonlypermitstheactiveparticipationoffossil-basedgeneration.Thisisbecauseallowancesarecalculatedandallocatedthroughfuel-andtechnology-specificbenchmarksforcoalandgaspowerplantsonly,whilenon-fossilgenerationsourcesarenotcoveredbythebenchmarks.Powergeneratorswithanemissionsintensityhigherthanthebenchmarksexperienceanallowancedeficit.However,thiscanonlybebalancedbyanallowancesurplusfrompowergeneratorscoveredbybenchmarks,andthathavealoweremissionsintensitythanthosebenchmarks.Generationsourcesthatarenotcoveredbythebenchmarks–suchasrenewables–cannottakepartinthecurrentETSexceptSwitchingtonon-fossilgenerationsourcescouldallowageneratortoavoidanallowancedeficitandtheassociatedcostofneedingtoacquireadditionalallowances.However,sincenon-fossilsourcesdonotreceiveallowances,theyefitfromsurplusallowancesthatcanbesold.ThisETSdesignoffuel-andtechnology-specificbenchmarksforonlycoalandgaspower,therefore,mainlylowerstheemissionsintensityofbenchmark-coveredgenerationsources,includingthroughylimitedencouragementforfuelswitchingtononfossilsources.EnhancementsinETSdesigncanaccelerateelectricitysectoralignmentwithacarbonneutralitytrajectoryStrongerdecarbonisationthanintheRPS-ETSScenariowouldbetteraligntheelectricitysectorwithChina’scarbonneutralitygoal.Inordertosupporteconomy-widecarbonneutralitybefore2060,China’spowersectorwouldlikelyneedtoachievenetzeroCO2emissionsbefore2055(IEA,2021a).AcceleratingthetransitionoftheelectricitysectorwouldnotonlyfurtherreduceCO2emissionsfromthebiggestsourceinChinabutalsomaximisethesector’sroleindecarbonisingend-usesectors,asgrowingelectrificationwithanincreasinglydecarbonisedelectricitysectorwouldfurtherreduceoverallemissions.Avoidingapacitiesandafastertransitionalsoincreasethechancesofreachingcarbonneutralityinanorderlyfashionandreducethepotentialburdenofemissionslock-inandstrandedassets(IEA,2021a).cenarioandacceleratealignmentwithacarbonneutralityemissionstrajectory.IntheETS+Scenarios,electricitysectoremissionsare38%lowerby2035comparedto2020–nearlydoublethereductionsasintheRPS-ETSScenario.oulddrivetheseadditionalemissionsreductionsIfmmaryhancingChinasETSforCarbonmmaryonPowerSectorllrightsreservedPAGE|14tCO.tCO.retainingthecurrentdesign–anintensity-basedETSwithfreeallocation–thebenchmarktighteningratewouldneedtobedoubledin2025-2030andalmostquadrupledin2030-2035(ETS+BMScenario),comparedtotheRPS-ETS2035.IntheETS+AuctionScenario,aroundaquarterofallowanceswouldneedtobeauctionedby2035whilemaintainingthesametighteningrateforcoalbenchmarksasintheRPS-ETSScenario.Athirdoption(ETS+CapScenario)istointroduceanabsoluteemissionscapthatisalignedwithacarbonneutralitypathway.FigureES.1CO2emissionstrajectoryfromelectricitygenerationbyscenario,2020-2035500040003000200002020202520302035RPSScenarioRPS-ETSScenarioEnhancedETS(ETS+)ScenariosIEAAllrightsreserved.StringentETSbenchmarksdriveefficiencyandCCUS;auctioningandacapencouragefuelswitchingDependingonitsdesign,theETScandriveemissionsreductionsthroughdifferentchannels.Inanintensity-basedETSwithfullyfreeallocationthroughcoalandgaspowerbenchmarks(RPS-ETSandETS+BMScenarios),theETSdeliversmostoftheemissionsreductionsbytransformingthecoalfleetthroughimprovingunabatedcoalfleetefficiencyandencouragingCCUSadoptionincoalpowerfrom2030onwards.Withincreasedbenchmarkstringency,theETS+BMScenariotriplesCCUS-relatedreductionscomparedtotheRPS-ETSScenarioin2035,withsomeverylimitedfuelswitchingfromcoaltogasandnon-fossiltechnologies.TheETS+AuctionScenariogeneratesmostoftheemissionsreductionsthroughfuelswitchingtonon-fossiltechnologies,mainlyonshorewindThescenario’seffectonfuelswitchingtogasandunabatedcoalfleetefficiencyimprovementsissimilarinmagnitudetothatintheRPS-ETSandETS+BMmmaryhancingChinasETSforCarbonmmaryonPowerSectorIEA.IEA.Allrightsreserved.PAGE|15MtCO2MtCO2itybasedETStoacapand-tradedesignwithastringentcapcouldsignificantlychangehowtheETSdrivesdecarbonisation.IntheETS+CapScenario,emissionsreductionsresultrelyfromfuelswitchingawayfromcoalpoweraroundtononfossiland10%togaspower.Whiletechnicalefficiencyimprovementsofthecoalfleetalsotakeplaceinthisscenario,theaverageoperationalefficiencydoesnotimproveasallcoalunitsseeareductioninrunninghours.FigureESAdditionalemissionsreductionsbychannelintheRPSETSandETS+ScenarioscomparedwiththecounterfactualRPSScenario,2025-20350-500-1000-1500ETSBMETS+AuctionETSBMETS+AuctionSwitchfromfossiltonon-fossiltechnologiesCoal-to-gasswitchSwitchfromunabatedcoaltocoalwithCCUSCoalfleetefficiencyimprovementsIEAAllrightsreserved.deconsiderablyincreasetheETSincentiveforfuelswitchingPartialauctioning(ETS+AuctionScenario)–leadingtoareductioninfreeallocationthroughcoalandgaspowerbenchmarks–raisestheeffectiveCO2costforcoveredfossil-basedgenerationsources.Itthusmakesthemmoreexpensivetoruncomparedwithnon-fossilgenerationtechnologies,therebyencouragingswitchingtorenewables.Atthesametime,theintensity-baseddesignstillencourageshigherfleetefficiencyandsomeCCUSdeployment.Transitioningtoacap-and-tradesystem(ETS+CapScenario)withastringentemissionscapwouldfurtherchangetheETSimpactsontechnologies.Bysettingapredeterminedemissionscapandmovingawayfromtechnology-specificbenchmarks,acap-and-tradeallowstheparticipationofallgenerationsourcesinachievingabsoluteemissionsreductions,insteadoffocusingonemissionsintensityreductionofcoalandgaspower.ItsdesignincentivisesgeneratorstoreduceCO2emissionsthroughthelowest-costabatementoptions,thusspurringemissionsreductionsmainlythroughfuelswitchingtocost-competitiverenewables.mm