Sustainability 12 04642

sustainability
Article
An Operation Benefit Analysis and Decision Model of
Thermal Power Enterprises in China against the
Background of Large-Scale New Energy Consumption
Xiaolong Yang 1,2,3 , Dongxiao Niu 1,3 , Meng Chen 1,3 , Keke Wang 1,3, *, Qian Wang 4
and Xiaomin Xu 1,3
1 School of Economics and Management, North China Electric Power University, Beijing 102206, China;
yangxiaolong@ncepu.edu.cn (X.Y.); ndx@ncepu.edu.cn (D.N.); chenmeng1024@ncepu.edu.cn (M.C.);
xuxiaomin0701@126.com (X.X.)
2 School of Economics and Management, Northeast Electric Power University, Jilin 132012, China
3 Beijing Key Laboratory of New Energy and Low-Carbon Development, Beijing 102206, China
4 School of Economics and Management, Jilin University of Chemical Technology, Jilin 132022, China;
wangqiankak@126.com
* Correspondence: wkk@ncepu.edu.cn

Received: 22 April 2020; Accepted: 3 June 2020; Published: 6 June 2020
Abstract: With the continuous increase in new energy installed capacity, the slowdown in the growth
of social power consumption, the pressure created by high coal prices, and the reduction in on-grid
electricity tariffs, the challenges facing the survival and development of thermal power generation
enterprises are becoming more severe. Hence, based on the cost–benefit analysis method, this paper
proposes a diversified operating benefit analysis and decision model for thermal power generation
enterprises that includes four profit models: power sales, peak load regulation (without oil), peak load
regulation (with oil), and generation right trading. The opportunity cost of peak load regulation
and generation rights trading was considered, and six scenarios were designed. An empirical
analysis was conducted by selecting a thermal power enterprise in Ningxia, Northwest China, as an
example, using scenario and sensitivity analyses. The results show that under the diversified business
model, thermal power generation enterprises can more effectively avoid the risks when the external
environment changes and significantly improve its economic benefits. The consumption of new
energy can be promoted, and positive social effects will be achieved. Therefore, the findings will help
the thermal power generation enterprises to face these challenges.
Keywords: new energy consumption; thermal power generation enterprises; deep peak load
regulation; generation rights trading; diversified business model
1. Introduction
The global energy shortage has become an increasingly serious problem, and there is continual
pressure to reduce carbon emissions [1]. In order to improve energy efficiency, countries around the
world are actively taking countermeasures. With the deepening of energy supply-side structural
reform in China, the survival and development of traditional thermal power generation enterprises
will face more severe challenges. In terms of the macro-economy, China’s is still under considerable
downstream pressure, consumption growth is slowing, and the increase in electricity consumption of
the entire society has been limited. The average increase in electricity consumption in China was only
4.9% from 2014 to 2018, as shown in Figure 1.
Sustainability 2020, 12, 4642; doi:10.3390/su12114642 www.mdpi.com/journal/sustainability

Sustainability 2019, 11, x FOR PEER REVIEW 2 of 22
downstream
Sustainabilitypressure, consumption
2019, 11, x FOR PEER REVIEW growth is slowing, and the increase in electricity consumption
2 of 22
of the entire society
Sustainability has
2020, 12, 4642been limited. The average increase in electricity consumption in 2China of 19 was
onlydownstream
4.9% from 2014 pressure,
to 2018,consumption
as showngrowth is slowing,
in Figure 1. and the increase in electricity consumption
of the entire society has been limited. The average increase in electricity consumption in China was
only 4.9% from 2014 to 2018, as shown in Figure 1.
Electricity consumption of the whole society (10^8 kWh) Growth rate
80,000 16.0%
Electricity consumption of the whole society (10^8 kWh)
14.8% 68,449
Growth rate
70,000
80,000 63,077 14.0%
16.0%
14.8%11.7% 59,198 68,449
70,000
60,000 53,223 55,233 55,500 63,077 14.0%
12.0%
49,591 59,198
60,000 46,928 11.7% 55,233 55,500 12.0%
50,000 53,223 10.0%
42,013 49,591
46,928 8.5%
50,000 10.0%
40,000 42,013 8.0%
7.5% 8.5%
40,000 6.6% 8.0%
30,000 7.5% 6.0%
5.5% 6.6%
30,000 5.0% 6.0%
20,000 5.5% 4.0%
3.8% 5.0%
20,000 3.8% 4.0%
10,000 2.0%
10,000 2.0%
0 0.5% 0.0%
0 0.5% 0.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018
2010 2011 2012 2013 2014 2015 2016 2017 2018
Figure 1. China’s
Figure 1. 1.
Figure social
China’s
China’s power
social power
social consumption
power consumptiongrowth
consumption growth from2010
from
growth from 2010
2010 toto
to 2018
2018
2018 (Data
(Data
(Data source:
source:
source: China
China
China electric
electric
electric
power yearbook).
power
power yearbook).
yearbook).
For
For For
power power
power supply
supply
supply construction,
construction,
construction, bybythe
by theend
the end of
end of 2018
2018the
2018 theentire
the installed
entire
entire generation
installed
installed capacity
generation
generation in in in
capacity
capacity
China
China was nearly1.9
1.9billion
billionKW.
KW.Although
Although thethe proportion
proportion and growth rate ofofinstalled capacity of of
China waswas nearly
nearly 1.9 billion KW. Although the proportion and
andgrowth
growth rate
rate installed
of capacity
installed capacity of
thermal power generation has recently declined year by year, the installed capacity still accounts for
thermal
thermal powerpower generation
generation has recently
has2 recently declined year by year, the installed capacity still accounts
declined year by year, the installed capacity still accounts for for
60.2%, as shown in Figure [2].
60.2%, as shown in Figure
60.2%, as shown in Figure 2 [2]. 2 [2].
Cumulative installed capacity（10^4kW） New installed capacity (10^4kW) Proportion

75.0%
120,000 114,367 75.0%
110,604
120,000 73.4% 105,388 114,367
69.1% 99,021 110,604
73.4% 72.3% 105,388 70.0%
100,000 71.6% 69.1% 91,569
72.3% 86,238 99,021
71.6%
81,900 70.0%
100,000 76,834 91,569
80,000 70,967
86,238 67.3%
81,900 65.0%
76,834 67.3% 65.7%
80,000 70,967 64.0% 65.0%
60,000 65.7% 62.3%
64.0% 60.0%
60,000 60.2%
40,000 62.3%
60.0%
60.2%
40,000 55.0%
20,000 10681 5867 5066 4338 5331 7452 6367 5216 3763 55.0%
20,000 0 10681 50.0%
5867 5066 4338 5331 7452 6367 5216
2010 2011 2012 2013 2014 2015 2016 2017 20183763
0 50.0%
Figure 2.2010
Figure 2.New
New 2011 capacity,
installed
installed 2012 cumulative
capacity, 2013
cumulative 2014
installed
installed 2015
capacity,
capacity, 2016
and
and 2017ofofthermal
proportion
proportion 2018 power
thermal power
generation
generation inin
China,
China,2010–2018
2010–2018(Data
(Datasource:
source: China electric power
China electric poweryearbook).
yearbook).
Figure 2. New installed capacity, cumulative installed capacity, and proportion of thermal power
TheThe
generation annual average
in China,
annual thermal
2010–2018
average thermal power
(Data
power equipment
source: Chinause
equipment isisonly
electric
use 4361
4361h.
power
only h.This
Thisisisfar
yearbook). farbelow
below5500 h, h,
5500 which
which
is the demarcation point for thermal power enterprises. The installed wind power
is the demarcation point for thermal power enterprises. The installed wind power and photovoltaic and photovoltaic
capacity
The
capacity is is
annual nearly
average
nearly 358MW,
358 MW,with
thermal with anaverage
power
an average growthuse
equipment
growth rate
rateisof 31.3%
only
of over
4361
31.3% h.five
over fiveyears,
This is farand
years, the
below
and installed
the5500 h, which
installed
capacity ratio reached 18.9%, as shown in Figure 3 [3].
is thecapacity ratio reached
demarcation point 18.9%, as shown
for thermal in Figure
power 3 [3]. The installed wind power and photovoltaic
enterprises.
capacity is nearly 358 MW, with an average growth rate of 31.3% over five years, and the installed
capacity ratio reached 18.9%, as shown in Figure 3 [3].
Sustainability 2020, 12, 4642 3 of 19

18.9%
40,000 19.0%
16.5% 35,889
36,000 17.0%
32,000 13.5% 29,267 15.0%
28,000 11.4% 13.0%
24,000 22,378 11.0%
8.8%
20,000 7.1% 17,293 9.0%
16,000 5.7% 7.0%
4.6% 12,153
12,000 3.1% 9241 5.0%
6483 6889 6622
8,000
8000 4845 5150 5085 3.0%
3011 2758 2902
4,000
4000 1861 1638 1.0%
1221
0 -1.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018
Figure
Figure 3.3.New
New installed
installed capacity,
capacity, cumulative
cumulative installed
installed capacity,
capacity, and proportion
and proportion of wind andofphotovoltaic
wind and
photovoltaic
power power
in China, in China,
2010–2018 2010–2018
(Data source:(Data
Chinasource: China New
New Energy Energy
Power PowerAnalysis
Generation Generation Analysis
Report).
Report).
The growth rate of the installed capacity in China has been higher than that of the electricity
The
consumptiongrowth ratewhole
of the of thesociety
installed capacity
in recent in China
years, and Chinahas been higher
still faces thethan that of
problem of the electricity
excess power
consumption of the whole
supply. With continuous society in
advances innew
recent years,
energy and Chinaand
technology still faces
the rapidthedecline
problem of excesscost,
in installed power
the
supply.
parity eraWith continuous
of China’s advances
new energy in new energy
generation technology
is coming. With theand the rapid decline
implementation in installed
of a renewable cost,
power
the parity era responsibility
consumption of China’s new energy
weight generation
system, is coming.
the market shareWith the implementation
of thermal power generation of a enterprises
renewable
power
will consumption
be further responsibility
negatively weight system,
affected. Therefore, given thethe market
backgroundshareofofvarious
thermal power generation
restrictive pressures
enterprises
(such as high will beprices,
coal further negatively affected.
environmental Therefore,
protection given the
requirements, lowbackground
thermal power of various
generationrestrictive
hours,
pressures (such as high coal prices, environmental protection requirements,
power market reforms and other constraints), avoiding policy dependence, adjusting profit models to low thermal power
generation
face market hours, powerand
competition, market reforms
improving theirand otheras constraints),
viability soon as possible avoiding policy worthy
have become dependence,
issues
adjusting profit models to face
for thermal power enterprises to explore.market competition, and improving their viability as soon as possible
haveSome
become worthyhave
scholars issues for thermal power
acknowledged enterprises
the dilemma to explore.
facing the development of Chinese thermal
power enterprises, and have comprehensively reviewed and analyzed the development of the thermal
Some scholars have acknowledged the dilemma facing the development of Chinese thermal
power industry in China. They have focused on the cost and benefits of thermal power [4], as well
power enterprises, and have comprehensively reviewed and analyzed the development of the
as analyzing and forecasting the low-carbon development of the Chinese thermal power industry to
thermal power industry in China. They have focused on the cost and benefits of thermal power [4],
achieve emission reductions and the sustainable development of China’s thermal power industry [5].
as well as analyzing and forecasting the low-carbon development of the Chinese thermal power
From the literature, the research on the thermal power enterprises benefits has been mainly conducted
industry to achieve emission reductions and the sustainable development of China’s thermal power
from two aspects: social benefits and economic benefits.
industry [5]. From the literature, the research on the thermal power enterprises benefits has been
Thermal power enterprises provide social benefits to indicate social responsibility and promote
mainly conducted from two aspects: social benefits and economic benefits.
energy conservation and emission reduction. The studies on social benefits mainly include the reduction
of COThermal
2 emissions,powerenergy savings,provide
enterprises and environmental
social benefits protection.
to indicateIn social
terms of improving social
responsibility benefits,
and promote
the ongoing
energy power transformation
conservation and emission within the framework
reduction. The studiesof global sustainable
on social transformation
benefits mainly include has been
the
studied in-depth
reduction of CO2based on theenergy
emissions, low-carbon development
savings, goals, reflecting
and environmental the influence
protection. In terms of of
technological
improving
progress and incentive
social benefits, policies
the ongoing on power
power generation within
transformation enterprises
the from an economic
framework perspective
of global sustainable[6].
The carbon dioxide
transformation trading
has been mechanism
studied in-depthaffects
basedtheon cost structure and
the low-carbon price model
development of thermal
goals, power
reflecting the
enterprises,
influence offurther affectingprogress
technological the production decisions
and incentive of the on
policies enterprises. To mitigate
power generation the environmental
enterprises from an
problems
economic caused by thermal
perspective [6]. Thepower
carbon enterprises, the performance
dioxide trading mechanismofaffects powerthe generation enterprises
cost structure has
and price
been evaluated
model of thermal according to the environmental
power enterprises, cost and
further affecting theother factors that
production can guide
decisions of thedecision-makers
enterprises. To
to formulate
mitigate the appropriate
environmental future production
problems causedprograms to improve
by thermal powertheir business performance
enterprises, the performance [7,8]. of
powerThermal
generationpower enterprises
enterprises aim
has to improve
been evaluated their economictobenefits
according to increase their
the environmental cost viability
and other in
the current
factors thatandcanfuture
guidemarket environment.
decision-makers The existing
to formulate studies onfuture
appropriate economic benefits programs
production were mainly to
conducted
improve from
their the perspectives
business performance of reducing
[7,8]. production costs, participating in peak load regulation,
trading power generation rights, etc.
Thermal
From thepower aspect enterprises
of reducing aim to improve their
production economic
costs, benefits to
some scholars increase
studied their
the viability in
technological
the current and future market environment. The existing studies on economic benefits were mainly
transformation of thermal power enterprises. The urgent task for thermal power enterprises is
conducted from the perspectives of reducing production costs, participating in peak load regulation,
trading power generation rights, etc.
developing low-carbon and efficient units, as they are going to become the main forces driving the
sustainable development of coal-fired power generation industry [9]. In response to the problems with
the operation of coal-fired power plants, methods to improve and upgrade coal-fired power plants have
been proposed [10–12]. The economic decision to transition toward flexible coal power transformation
in China is determined by the compensation standards and the time and the depth of peak load
regulation. With a certain depth of peak regulation at suitable times, the power plants that have
reasonable compensation standards are willing to undergo coal power flexibility transformations [13].
A multi-generation system based on the integrated three-effects refrigeration system was proposed to
substantially improve thermal power efficiency [14]. Other scholars researched the fuel cost of thermal
power enterprises, which is the central link of production control and economic calculation of the
enterprises [15]. A hybrid fuzzy multi-attribute decision-making approach (fuzzy entropy-TOPSIS)
was proposed to select the best green supplier [16]. Thermal power enterprises can ensure a long-term
stable source of coal by selecting suitable coal suppliers [17]. To optimize transportation and storage
in regional coal distribution planning, a feasible model was introduced that minimizes regional
transportation and storage costs [18]. Considering the coal safety inventory demand of coal-fired
power enterprises, fluctuations in coal demand, and the uncertainty of coal prices and coal inventory
replenishment, with maximizing corporate profits as an optimization goal, coal-fired coal inventory
was optimized [19].
To participate in deep peak load regulation, the flexibility of thermal power enterprises is valuable
for power systems that have a high share of renewable energy [20], so participation in peak load
regulation is also a business path for thermal power enterprises [21]. The peak load regulation cost of
coal-fired thermal power units was comprehensively analyzed considering their coal consumption
costs, fuel consumption costs, loss costs, and environmental costs. A mathematical model of the peak
load regulation cost of coal-fired thermal power units was reported [22]. On this foundation, a new
multi-target commitment method was proposed, and a thermoelectric cost model was developed to
accurately determine different peak regulation schemes [23]. The market rules of Northeast China’s
graded deep peak shaving were studied. Considering the cost and compensation under different loads
and the impact of coal price on peak shaving income, for thermal power units in the Northeast of
China, Zhang et al. [24] constructed an optimal economic strategy for grading and deep peak load
regulation. Regarding the peak shaving compensation of cogeneration units, the bidding strategies
and payment of corresponding strategies for various thermal power plants were discussed in different
compensation scenarios [25]. By optimizing the peak shaving compensation price, and the distribution
strategy of peak load shaving income in the thermal system, cogeneration units were encouraged to
fully participate in peak shaving to improve power system peak flexibility [26].
Power generation rights trading between thermal power enterprises and wind power plants is an
efficient method to meet the demands of wind power development, which can considerably improve
the consumption of new energy and improve thermal power units for the greater good [27]. Power
generation rights trading among new energy and self-generating stations is effective [28]. The profits
of thermal power enterprises in power generation rights trading can be obtained through subsidy
coefficients and sharing coefficients [29]. Based on different optimization goals, many scholars have
studied the process of power generation rights trading in which thermal power enterprises participate.
As the risk of power generation rights trading is having an increasingly significant influence on the
profits of power plants, the impact of power generation rights trading on profits has been discussed
by setting different risk rates for the sellers and buyers in transactions [30]. From the perspective of
coal consumption and the system network loss of generating units, a model that maximizes energy
savings after trading was proposed [31]. A multi-objective optimization model that can realize the
comprehensive optimization of load margins and generator output costs considering carbon emission
constraints was proposed to guide thermal power enterprises when they participate in power generation
rights trading [32].
Other researchers comprehensively evaluated the benefits of thermal power enterprises. Starting
from the characteristics of the costs–benefits of thermal power enterprises, the benefits were evaluated
based on an index system established from three aspects: economic benefits, environmental benefits,
and social benefits [33]. Considering flexibility, economy, reliability and technical standards, Li and
Chen et al. [34] proposed a hybrid multi-criteria decision-making model to evaluate the sustainable
development level of China’s coal-fired power plants.
The studies mentioned above were mainly conducted from two aspects: By furthering energy
conservation and emission reduction to improve social benefits, and by focusing on fulfilling the
social responsibility of thermal power generation enterprises. However, studies on improving the
viability of thermal power enterprises are lacking, and aimed at improving the efficiency of thermal
power enterprises from individual aspects (such as saving production costs, participating in peak load
regulation, and trading power generation rights), without comprehensively considering these business
models. Against the large-scale clean energy consumption background, studies about the diversified
business model of thermal power enterprises are required.
Given this background, we analyzed the costs and benefits of thermal power enterprises during
operation based on the cost–benefit analysis method from the perspective of thermal power enterprises,
and analyzed the diversified operation benefits and decision-making model of thermal power
enterprises. Combined with the actual operation of the current electricity market, six possible
business scenarios were designed, including four profit scenarios of electricity sales, power generation
rights trading, peak load regulation (without oil), and peak load regulation (oil). The opportunity
cost of peak load regulation and power generation rights trading loss was also considered. Finally,
using a thermal power enterprise in Ningxia, Northwest China, as an example of an empirical analysis.
Through scenario analysis and sensitivity analysis, we verified that thermal power enterprises could
more effectively avoid the risk of external environment changes and significantly improve the economic
benefits of the enterprise in a diversified business scenario. Power generation rights trading and
in-depth peak load regulation can also effectively promote the consumption of renewable energy.
The rest of this paper is arranged as follows: Section 2 describes analysis and setting of the six
business scenarios, Section 3 describes the analysis model, Section 4 outlines the empirical case study,
Section 5 provides the result discussion and scenario analysis, and Section 6 is the conclusion and
proposes future research.
2. Scenario Setting
For thermal power generation enterprise, power sales revenue is the most basic profit model.
With the deepening of the reform of the power system and the increasing pressure for environmental
emissions reduction, the consumption of clean energy must be further increased, alternative production
of clean energy power generating units must be encouraged, and the goals of social energy conservation,
emissions reduction, and efficient resources use must be achieved. Power generation rights trading
can generate incremental profits for both parties simultaneously. Therefore, thermal power generation
enterprises should actively engage in power generation rights trading with clean energy power
generation enterprises, which can further expand the source of revenue.
The installed capacity of renewable energy, such as wind energy and solar energy, has grown
rapidly in recent years. Due to the impact of intermittent and anti-peak load regulation characteristics
of renewable energy power generation and climate change, the peak valley difference of the power
grid continues to increase, resulting in increasing pressure for peak load regulation of the power
grid. According to the existing auxiliary service market operation rules, thermal power generation
enterprises can actively participate in peak load regulation auxiliary services, which can reduce the
apportionment cost of the auxiliary service market and produce certain economic compensation to
increase operating income.
Therefore, in the context of this external environment, to better illustrate the applicability of
the methods and the differences in the benefits of thermal power generation enterprises in different
business scenarios, we examined the possible combination of multiple business scenarios based on
four revenue modes, i.e., power sales revenue, power generation rights trading revenue, peak load
regulation service revenue (without oil), and load regulation service revenue (with oil); six specific
business scenarios are proposed for comparative analysis. The specific scenario combinations are listed
in Table 1.
Table 1. Scenarios for the business model of thermal power generation enterprises.
Scenario Business Model

A power sales
B power sales + generation rights trading
C power sales + peak load regulation (without oil)
D power sales + generation rights trading + peak load regulation (without oil)
E power sales + peak load regulation (without oil) + peak load regulation (with oil)
power sales + generation rights trading + peak load regulation (without oil) + peak
F
load regulation (with oil)
3. Model Description
The profit model literature for thermal power generation enterprises in China is mainly
concentrated on power trading, and the profit model of thermal power generation enterprises
is relatively simple. Most business in power sales is settled through the power grid—and the other
part involves signing contracts with large power users and contract settlement. Therefore, thermal
power generation enterprises must actively expand their business paths and continuously reduce their
production costs to strengthen capacities and achieve sustainable development.
3.1. Income Analysis of Diversified Operation
3.1.1. Income of Power Sales

The thermal power generation enterprises mainly consider power as their product, and sell power
to energy customers to earn effective income, which can be expressed as the product of on-grid power
and on-grid electricity price:
Rog (P) = Qon-grid (P) × ωon-grid (1)
where Rog (P) is the income of power sales; Qon-grid (P) is the on-grid electricity power quantity, which
refers to the power input from the thermal power generation enterprise to the power grid enterprises
at the on-grid power metering point, that is, the power sold by the power plants to the power supply
enterprises; and ωon-grid is the unit on-grid electricity price, which represents the calculation price of
electric power (purchased by power grid enterprises) when the power generation enterprises connect
to the main grid [35].
3.1.2. Income of Peak Load Regulation

The main participants in the peak load regulation auxiliary market are grid-connected power
plants (including public thermal power plants, wind power plants, photovoltaic power plants,
and hydropower stations with an installed capacity of 50 MW and above), electricity storage consumers,
and interruptible load consumers (who have been admitted to enter the market). Peak load regulation
service falls into two categories: basic (obligatory) peak load regulation, and paid peak load regulation.
Paid peak load regulation is traded on the electricity auxiliary service market, including real-time deep
peak load regulation, mediation standby transactions, interruptible load transactions, and electricity
storage transactions. We mainly studied deep peak load regulation. The income generated by thermal
power units participating in deep peak shaving can be expressed as the product of the trading electricity
quantity and the clearing electricity price:
n
X
Rplrs,i (P) = [Qplrs,i (P) × ωplrs,i ] (2)
i=1
where Rplrs,i (P) is the income of deep peak load regulation, Qplrs,i (P) is the trading electricity quantity
of the thermal power units taking part in deep peak load regulation at i level in a certain period, and
ωplrs,i is the clearing electricity price in the market corresponding to the i level in a certain period.
3.1.3. Income of Generation Rights Trading

Power generation rights trading refers to the transaction behavior of power generation enterprises
transferring contracts power (basic electricity contracts and priority electricity contracts) to other power
generation enterprises through the trading platform built in the electricity market with marketization
methods such as bilateral negotiation, centralized bidding and listing. Due to the difference in generation
costs between the buyers and the sellers, the transaction of generation rights can produce incremental
profits for both parties simultaneously. At this point, the cost of new energy power generation is
much lower than the cost of thermal power generation, and no carbon emissions are generated during
new energy power generation. Therefore, given excessive coal prices, thermal power generation
enterprises can transfer power generation rights to obtain corresponding benefits. When participating
in the trading of power generation rights, the income of thermal power generation enterprises can be
expressed as:
R g = Q g × (ωs − ωe ) (3)
where R g is the income of generation rights trading, Q g is the trading electricity quantity of
power generation rights transferred by thermal power generation enterprises to efficient units and
environmentally friendly units, ωs is the benchmark power price of the region, and ωe is the clearing
price in the power generation trading market [36].
3.2. Cost Analysis of Diversified Operation
3.2.1. Cost of Power Production

We focused on the benefit analysis of thermal power generation enterprises under the diversified
business model. According to the variable cost analysis method, regardless of the business model,
other costs change less with the output except for production costs. Therefore, the cost of power
generation is usually represented by the energy consumption characteristic curve of thermal power
generating units:
P
Xmax P
Xmax
Cog (P) = F(P) × Tp,k ×ωcoal + F(P) × Tp,k ×Cother (4)
P=Pmin P=Pmin
where
F(P) = aP2 + bP + c (5)
where Cog (P) is the power generation cost and F(P) is the energy consumption characteristic curve
function of thermal power generating units. At present, the coal consumption characteristic curves of
thermal power units are mainly obtained from the performance parameters or thermal test data provided
by the manufacturer, and these curves remained unchanged for a long time. However, the actual
operation of the units is affected by many factors, such as operation mode, coal quality, equipment
status, operator’s technical level, etc., which makes the curves quite different from actual operation.
Therefore, some scholars used intelligent algorithms to refit the coal consumption characteristic curves
in the actual operation and obtained the quadratic function curve, which may be closer to the original
data point and can more accurately depict the coal consumption operation performance of each
unit [37]. P is the actual output of the units when participating in peak load regulation; a, b and c are the
consumption characteristic coefficients of thermal power generating units, their values are associated
with the types and characteristics of the thermal power units [37]; ωcoal is the price of standard coal;
Tp,k is the corresponding operating time of thermal power generating units at different power P; and
Cother are other unit costs except for the coal cost.
When thermal power enterprises participate in deep peak load regulation, as the load rate
continues to decrease, the deep depressurization output adds excessive thermal stress to the units’
rotor system. Excessive alternating thermal stress can cause low cycle fatigue life loss and creep loss,
which can result in the severe deformation and fracture of the unit body and reduce unit life. Therefore,
there will be additional unit loss costs, which are as follows:
Cco (P) = βSunit /2Nt (P) (6)
where Cco (P) is the unit loss cost when the thermal power generating units are involved in deep peak
load regulation; β is the actual operating loss coefficient of thermal power generating units; Sunit is the
purchase cost of thermal power units; and Nt is the rotor cracking times of thermal power unit at time
t, and its value is related to P, which is the power of thermal power generating units [38].
When the units participate in deep peak load regulation, they are not able to maintain stable
operation because the combustion stability of the boiler and the safety of the hydrodynamic working
conditions decrease rapidly. As a result, oil injection is required to guarantee the units’ safe operation.
The oil consumption cost is:
Coil (P) = Qoil (P) × ωoil (7)
where Coil (P) is the cost of using oil for the low load operation of thermal power units, Qoil (P) is the
amount of oil needed for thermal power units with low load operation, and ωoil is the oil price for the
season [39].
3.2.2. Loss Cost of Less Power Generation When Units Participate in Deep Peak Load Regulation
n
X Pb
X
Cplrsog (P) = Qplrs,i (P) × ωon-grid − F(P) × Tp,i × ωcoal − Qplrs,i (P) × Cother (8)
i=1 P=Pmin
where Cplrsog (P) is the loss of less power generation (due to the participation in peak load regulation),
Qplrs,i (P) is the trading electricity quantity of the thermal power units participating in the deep peak
service at i level in a certain period, ωon-grid is the on-grid electricity tariff for thermal power, ωcoal is
the price of standard coal, Pb is the benchmark load value of thermal power generation enterprises
participating in deep peak load regulation, and Tp,i is the time required for the units to produce
electricity with Qplrs,i (P) production under different power P [40].
3.2.3. Apportioned Cost When the Units Do Not Participate in Peak Load Regulation
The compensation cost for paid peak load regulation is apportioned by thermal power enterprises,
wind power plants and photovoltaic power plants, whose load rate is higher than or equal to the
benchmark load rate of deep peak load regulation. Thermal power generation enterprises are divided
into different grades based on the actual peak regulation rate to apportion the cost with the “ladder”
quotation. Therefore, if the thermal power generation enterprises do not participate in deep peak load
regulation, the cost can be expressed as follows:
Qre
Cplrc = × Wtotal (9)
Qre + Qothers
where
n
X
Qre = (Q g,j × k j ) (10)
j=1
where Cplrc is the apportioned cost when the units do not participate in peak load regulation, Qre is the
electricity quantity corrected by the power generation enterprise during peak load regulation period,
Qothers is the corrected total electricity quantity of all wind farms and photovoltaic power plants in the
region, Wtotal is the total amount of peak shaving compensation, Q g,j is the power generation quantity
when the units’ load rate ranges at j level, and k j is the correction coefficient when the load rate range
is at j level.
3.2.4. Loss Cost of Less Power Generation When the Generation Rights Are Traded
C g (P) = Q g × ωon-grid − ωcoal × F(P) × Ts − Q g × Cother (11)
where C g (P) is the cost of less power generation when the generation rights are traded, Q g is the trading
electricity quantity of power generation rights transferred by thermal power generation enterprises to
efficient units and environmentally friendly units, ωon-grid is the on-grid electricity tariff for thermal
power, ωcoal is the price of standard coal, and Ts is the time required for thermal power generating
units to produce electricity with Q g production at a certain power Ps [41].
3.3. Objective Functions and Constraints

To summarize, the operating income of thermal power generation enterprises in the diversified
business model can be expressed as:
Pb ≤ P < Pmax


 Rog (P) + R g
Pa < P < Pb

RT =  Rog (P) + Rplrs,1 (P) (12)


Pmin < P ≤ Pa

 R (P) + R
og plrs,2 (P)
The operating cost of thermal power enterprises in the diversified business model can be expressed
in sections. It includes the cost of power production, the increased unit loss cost, the oil consumption
cost, and the loss cost of less power generation when the units participate in deep peak shaving, and
the generation rights are traded. It can be expressed as:



 Cog (P) + Cplrc + C g (P) Pb ≤ P < Pmax
Pa < P < Pb

CT =  Cog (P) + Cco (P) + Cplrsog (P) (13)


Pmin < P ≤ Pa

 Cog (P) + Cco (P) + Coil (P) + Cplrsog (P)

According to the income function and the cost function of the thermal power generation enterprise
established in the diversification model, taking the maximum operating benefit of the units as the
objective function, it is expressed as follows:
Pb ≤ P < Pmax



 Rog (P) + R g − Cog (P) − Cplrc − C g (P)
Pa < P < Pb

maxL = RT − CT =  Rog (P) + Rplrs (P) − Cog (P) − Cco (P) − Cplrsog (P) (14)



 R (P) + R (P) − C (P) − C (P) − C (P) − C
plrsog (P) Pmin < P ≤ Pa

og plrs og co oil
where L is the diversified operating profits of thermal power generation enterprises, Rog (P) is the
income of power sales, Rplrs (P) is the income of peak load regulation, Rg is the income of generation
rights trading, Cog (P) is the power generation cost of thermal power enterprises, Cco (P) is the unit loss
costs when units participate in deep peak load regulation, Coil (P) is the cost of oil consumption when
the thermal power units operate with low load, Cplrc is the apportioned cost when the units do not
participate in peak load regulation, Cplrsog (P) is the cost of less power generation (due to participating
in peak load regulation), and C g (P) is the cost of less power generation when the generation right
is traded.
The constraints of thermal power generation enterprises in the diversified business model are
mainly the power constraints of the thermal power units, the declared price constraints of deep peak
load regulation, the declared electricity quantity constraints of deep peak load regulation, and the
constraints on the electricity quantity in generation rights trading:



 Pmin ≤ P ≤ Pmax
 ωplrs,min ≤ ωplrs,i ≤ ωplrs,max



(15)
0 ≤ Qplrs,i (P) ≤ Qplrs,max (P)





 0 ≤ Q g ≤ Q g,max

where Pmax is the maximum output power of the units; Pmin is the output power of the given minimum
operating mode of the units, that is, the limit load value of the thermal power units participating in
deep peak regulation; ωplrs,min is the lowest quotation; ωplrs,max is the highest quotation; Qplrs,max (P) is
the maximum electricity quantity when thermal power units participate in deep peak load regulation;
and Q g,max is the maximum electricity quantity in generation rights trading.
4. Empirical Study
We analyzed the diversified business model of the thermal power generation enterprise in
the Ningxia Autonomous Region of Northwest China, which has a high proportion of new energy
installed capacity.
4.1. Background Introduction

The thermal power enterprise has built two 600 MW supercritical surface indirect air-cooled
coal-fired units to complete the in-depth replacement of fossil energy with clean energy from the
Northwest Power Grid and Ningxia Power Grid as soon as possible. According to the requirements of
the State Grid Corporation of China (SGCC) for the doubling of new energy power generation and
its proportion, and double reduction of abandoned new energy power and its rate, the enterprise
completed a flexibility retrofit project for supercritical thermal power units to further improve the
comprehensive performance of the units and their competitiveness in the auxiliary service market.
At present, the transformed units have achieved a minimum technical output of 30%, the NOX emission
of the units by 30–50%, the boiler maximum continue rate (BMCR) operating conditions are less than or
equal to 50 mg/Nm3 , and the average load response rate is greater than or equal to 2.0%/min. The units’
fast start-stop capability has reached a relatively advanced level among similar units, so the enterprise
is competitive in terms of deep peak load regulation.
4.2. Model Parameters

The data used in the empirical analysis were analyzed with 600 MW thermal power units. The unit
cost of the thermal power units was 3646 yuan/kW. In accordance with the boiler parameters and the
unit performance test results, the value of a was 0.000169, the value of b was 0.27601, and the value of c
was 11.46196 in the energy consumption curve function of the coal-fired units.
According to the actual 2018 operating data, the thermal power units were annually used for
5108.2 h, and the unit price of standard coal was 514.15 yuan/ton. Moreover, the on-grid electricity
tariff of thermal power was 259.5 yuan/MWh, the electricity quantity brought by power generation
rights trading was 312,000 MWh, and the average price difference of power generation rights trading
was 50 yuan/MWh. Qplrs,max (P), which represents the maximum electricity quantity when thermal
power units participate in deep peak load regulation, was 25,374 MWh, in which the power quantity of
deep peak load regulation accounted for 88% when the units’ average load rate P fit the range (Pa , Pb ),
whereas the power quantity of deep peak load regulation accounted for 12% when P fit the range
(Pmin , Pa ].
According to Notice on operation rules (Trial) of Ningxia electric power auxiliary service
market [42], the ladders quotation method is adopted for deep peak shaving transactions. The bid
quotation is ωplrs,1 when P (the units’ average load rate) fits the range (Pa , Pb ) and ωplrs,1 ranges between
Pmin is the output power of the units with given minimum operating mode, that is, the limit load
Pa Pb
value of the thermal power units in the state of deep peak regulation; is 40%; and is 50%.
The process of thermal power enterprises
Sustainability 2019, 11, x FOR PEER REVIEW participating in deep peak load regulation is illustrated
12 ofin
22
Figure 4.
0Pand 0.38 yuan/kWh. The bid quotation is ωplrs,2 when P fits the range (Pmin , Pa ] and when ωplrs,2
min is the output power of the units with given minimum operating mode, that is, the limit load
ranges between 0.38 and 0.95 yuan/kWh, Depth Peak where Pmax is the maximum
Load Regulation output
Basic Peak Loadpower ofn the units; Pmin is
Regulatio
P a P
the output
value of thepower
thermal of the units
power with
units ingiven minimum
the state of deepoperating mode, that is,isthe
peak regulation; 40%; andloadb value
limit is 50%.of
the
Thethermal
processpower unitspower
of thermal in the state of deepparticipating
enterprises peak regulation; Pa ispeak
in deep 40%;load Pb is 50%. is
andregulation The process of
illustrated in
thermal
Figure 4. power enterprises participating
Bid Q uo tation in deep peak load
Bid Q uo tation regulation is illustrated in Figure 4.
Pmi n 0-0.38 Pa 0.38-0.95 Pb Pma x
Yuan/kW h Yuan/kW h
Depth Peak Load Regulation Basic Peak Load Regulatio n
Figure 4. The process of thermal power enterprises participating in deep shaving service.
The operating loss coefficient

Bid Q uo() is 1.2 when
tation Bid Qunits
uo tationparticipate in deep peak load regulation
β Pmi n 0-0.38 Pa 0.38-0.95 Pb Pma x
(without oil), whereas is 1.5Yuan/kW
whenhunits participate
Yuan/kW hin deep peak load regulation (with oil). The
oil consumption ofThe

the units isof4.8 t/h, and the price of oil is 6130 yuan/ton. The relationship between
Figure 4. The process
Figure4.
N (the rotor process of thermal
thermal power
power enterprises
enterprisesparticipating
participatingin
indeep
deepshaving
shavingservice.
service.
cracking times) and P (the units’ load rate) during the deep peak load regulation is
The operating
as follows [43]: loss coefficient () is 1.2 when units participate in deep peak load regulation (without
The operating loss coefficient () is 1.2 when units participate in deep peak load regulation
oil), whereas β is 1.5 when units participate in deep peak load regulation (with oil). The oil consumption
β is 1.5
of the units
(without is whereas
oil), 4.8 t/h, and theN (price
P )when
= 0.005778
of oil is P
units 3
6130− 2.682 P2in
yuan/ton.
participate + 484.8
ThePpeak
deep − 8411
relationship N (the
between(with
load regulation rotor
oil).(16)
The
cracking times) and P (the units’ load rate) during the deep peak load regulation
oil consumption of the units is 4.8 t/h, and the price of oil is 6130 yuan/ton. The relationship between is as follows [43]:
N (the
When rotor
thecracking
thermal times)
powerand P (thedoes
enterprise units’not load rate) during
participate in the
deep deep
peak peakloadload regulationitsis
regulation,
3 2
as follows [43]:
apportioned
N ( P ) = 0.005778P − 2.682P + 484.8P − 8411
cost is graded with different load rate intervals. If the load rate is higher than the baseline
(16)
of paid peak load regulation but less than 70%, it is categorized as the first level; if the load rate is
When the thermal power enterprise does 3 not participate in deep peak load regulation, its
between 70% and 80%, it is the N ( Psecond
) = 0.005778
level; Pand − 2.682 2
+ 484.8
if thePload ratePis− 8411
higher than 80%, it is the third (16)
apportioned cost is graded with different load rate intervals. If the load rate is higher than the baseline
level. The correction coefficients corresponding to the three
of paid peak load regulation but less than 70%, it is categorized as the first levels are k1 = 1 , k = 1.5 and k
level;2 if the load rate 3 =2 is,
When the thermal power enterprise does not participate in deep peak load regulation, its
respectively.
between 70% and 80%, it is the second level; and if the load rate is higher than 80%, it is the third level.
apportioned cost is graded with different load rate intervals. If the load rate is higher than the baseline
The correction coefficients corresponding to the three levels are k1 = 1, k2 = 1.5 and k3 = 2, respectively.
According
of paid peak loadto the Notice on
regulation butannouncing
less than 70%,the compensation
it is categorized allocation of Ningxia
as the first electric
level; if the loadpower
rate is
According to the Notice on announcing the compensation allocation of Ningxia electric power
auxiliary service market (NCERB), the corrected quantity of electricity was 5,829,820
between 70% and 80%, it is the second level; and if the load rate is higher than 80%, it is the third MWh and the
auxiliary service market (NCERB), the corrected quantity of electricity was 5,829,820 MWh and the
total apportioned cost was 113.79 million yuan for one year since the peak load
k1 =load regulation market
level.apportioned
total The correction costcoefficients
was 113.79 corresponding
million yuan for to one
the three levelsthe
year since arepeak 2 = 1.5 andmarket
1, kregulation k3 = 2 ,
began operation in May 2018 [44]. The monthly data of the corrected electricity quantity and the peak
respectively.
shaving cost-sharing are shown in Figures 5 and 6. Model detail parameters can be seen in Appendix
shaving cost-sharing are shown in Figures 5 and 6. Model detail parameters can be seen in Table A1.
A, Table A1.
According to the Notice on announcing the compensation allocation of Ningxia electric power
auxiliary service market (NCERB), the corrected quantity of electricity was 5,829,820 MWh and the
total apportioned cost Corrected
was 113.79 million
Quantity yuan for oneMWh）
of Electricity（Unit: year since the peakGrowth load
Rateregulation market
1,200,000 500%
1,021,183
shaving cost-sharing
1,000,000 are shown in Figures 5 and 6. Model detail parameters can
908,710be seen in Appendix
400%
A, Table A1.
800,000 690,872 300%
652,682
Corrected Quantity of Electricity（Unit: MWh） Growth Rate
600,000 200%
1,200,000 437,520 471,543 500%
392,540 364,088 333,866 1,021,183
400,000 100%
1,000,000 250,153 908,710 400%
142,326 164,335
200,000 0%
800,000 690,872 300%
652,682
0 -100%
600,000 200%
May-18
437,520 Jun-18 Jul-18 Aug-18 Sep-18 471,543
Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
392,540 364,088 333,866
400,000 100%
250,153
Figure 5. The corrected
142,326 electricity quantity of Ningxia auxiliary service market from May 2018 to April
164,335
200,000 0%
2019. (Data source: Northwest China Energy Regulatory Bureau of National Energy Administration of
the People’s
0 Republic of China). -100%
May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
Figure 5. The corrected electricity quantity of Ningxia auxiliary service market from May 2018 to April
Sustainability 2020, 12,
2019. (Data 4642 Northwest China Energy Regulatory Bureau of National Energy Administration
source: 12 of 19
of the People’s Republic of China).
Cost Sharing (Unit: Ten Thousand Yuan） Growth Rate

3000 1200%
2480
2500 1000%
1974 800%
2000
1608
600%
1500 1373
400%
929
1000 748 732
612 200%
500 219 260 285 0%
160
0 -200%
May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
Figure
Figure 6.6. The
The peak
peak shaving
shaving cost-sharing
cost-sharing of
of Ningxia
Ningxia auxiliary
auxiliary service
service market
market from
from May
May 2018
2018 to
to April
April
2019. (Data source: Northwest China Energy Regulatory Bureau of National Energy Administration
2019. (Data source: Northwest China Energy Regulatory Bureau of National Energy Administration of
of
thethe People’s
People’s Republic
Republic of of China).
China).
Simulation Results
4.3. Simulation Results
4.3.1. Scenario
4.3.1. Scenario A
A
The thermal
The thermal powerpower generation
generation enterprise
enterprise only
only carries
carries out
out a a single
single business
business model.
model. ItIt generates
generates
electricity for sales to earn income, and does not participate in the trading of power
electricity for sales to earn income, and does not participate in the trading of power generation rights generation rights
and in-depth peak load regulation. The units’ actual output value P fits the range [PPb ,,PPmax ), so the
and in-depth P fits the [ b ma x ) so the
enterprise haspeak load regulation.
to share The units’
the apportioned cost.actual outputtovalue
According the equations inrange
Section 3.3, the ,profits
enterprise
under scenariohas to A share the apportioned
are calculated as 17.4592 cost. According
million yuan. to the equations in Section 2.3, the profits
under scenario A are calculated as 17.4592 million yuan.
4.3.2. Scenario B
4.3.2. Scenario B
Because the unit price of coal for production is too high, the thermal power generation enterprise
Because
not only sells the unit price
electricity, butof coal
also for production
actively engages in is too high, therights
generation thermal power
trading generation
with enterprise
clean energy power
not only sells
generation electricity,
enterprises to but alsoexpand
further activelythe
engages
sourcesinofgeneration rights trading
income. However, with
they still doclean energy
not provide
power
in-depth generation
peak loadenterprises
regulation to further
under expand
scenario the units’
B. The sources of income.
actual output However, they still
value P is within thedo not
range
[Pb , Pmaxin-depth
provide ) when they peak participate in peakunder
load regulation load regulation,
scenario B. so Thethe compensation
units’ actual outputcostvalue P
must be shared for
is within
the range
[ Pb , Pma x )
not participating in peak load regulation services. Based on the equations in Section 3.3, the profits
under scenario B werewhen they participate
calculated as 31.1432 in peak yuan.
million load regulation, so the compensation cost must
be shared for not participating in peak load regulation services. Based on the equations in Section 2.3,
the profits
4.3.3. under
Scenario C scenario B were calculated as 31.1432 million yuan.
In addition to selling electricity, thermal power generation enterprises provide peak load regulation
4.3.3. Scenario C
to reduce the peak load compensation cost-sharing expenses. During in-depth peak load regulation,
In addition
the units’ to selling
actual output value electricity, thermal
P is within the range (power
Pa , Pb ),generation enterprises
so oil is not required providecombustion.
to maintain peak load
regulation
However, theto reduce the peak
continuous load compensation
reduction cost-sharing
of the units’ load rate willexpenses.
generate During in-depth
additional units’ peak load
loss costs.
Therefore, according to the equations in Section 3.3, the profits under ( P scenario
,P ) C were calculated as
regulation, the units’ actual output value P is within the range a b , so oil is not required to
25.392 million yuan.
maintain combustion. However, the continuous reduction of the units’ load rate will generate
additional units’
4.3.4. Scenario D loss costs. Therefore, according to the equations in Section 2.3, the profits under
scenario C were calculated as 25.392 million yuan.
The thermal power generation enterprise sells electricity, actively trades power generation rights,
4.3.4. Scenario D in peak load regulation simultaneously. The units’ actual output value P is within
and participates
the range (Pa , Pb ) when they participate in peak load regulation, so oil is not required to maintain
combustion. However, the continuous reduction of the units’ load rate generates additional units’ loss
The thermal power generation enterprise sells electricity, actively trades power generation rights,
and participates in peak load regulation simultaneously. The units’ actual output value P is within
(P ,P )
the range a b when they participate in peak load regulation, so oil is not required to maintain
combustion. However, the continuous reduction of the units’ load rate generates additional units’ loss
Sustainability 2020, 12, 4642
costs. Therefore, according to the equations in Section 2.3, the profits under scenario D13were of 19
calculated as 39.0782 million yuan.

costs. Therefore, according to the equations in Section 3.3, the profits under scenario D were calculated
4.3.5. Scenario E
as 39.0782 million yuan.
The thermal power generation enterprise participates in deep peak load regulation while selling
4.3.5. Scenario
electricity, E does not trade power generation rights. During the peak load regulation period, the
but it
The thermal power generation enterprise participates ( P , P ) in deep peak load regulation while selling
units’ actual output value P is within the range a b without oil to maintain combustion, where
electricity, but it does not trade power generation rights. During the peak load regulation period,
P units’
the actual
is within theoutput
( PminP, Pisa )within
rangevalue theisrange
, so oil (Pa , P
required tob )maintain
without oil to maintainand
combustion combustion,
units’ losswhere P
cost is
generated. range (Pmin
is within theTherefore, , Pa ), so oil
according toisthe
required to maintain
equations in Sectioncombustion
2.3, the and units’
profits loss cost
under is generated.
scenario E were
Therefore,
calculated as according to the equations
25.5674 million yuan. in Section 3.3, the profits under scenario E were calculated as
25.5674 million yuan.
4.3.6. Scenario F
4.3.6. Scenario F
In addition to the normal production of electricity, the thermal power generation enterprise also
activelyIn addition to the normal
trades power generation production
rights andof electricity,
provides the thermal
in-depth power
peak loadgeneration
regulationenterprise also
concurrently.
During in-depth peak load regulation, oil is not required to maintain combustion when P is within
actively trades power generation rights and provides in-depth peak load regulation concurrently.
During in-depth peak load regulation, oil is not required to maintain combustion when P is within
( P , P ) andoiloilis isnotnot
(Paa , Pbb ), and required
required to maintain
to maintain combustion
combustion when P when P (isPmin
is within within
( Pmin ,generating
, Pa ), while
Pa )
, whilet
generating
unit loss costs t unit loss costs
in different in different
stages. stages.
Therefore, Therefore,
according to theaccording
equationsto inthe equations
Section 3.3, theinprofits
Section 2.3,
under
the profits
scenario undercalculated
F were scenario Faswere39.2513 calculated
millionas 39.2513 million yuan.
yuan.
The profits value of each scenario is shown in Figure 7.
The profits value of each scenario is shown in Figure 7.
Unit: Ten Thousand Yuan

5000
3907.82 3925.13
4000
3114.32
3000 2539.42 2556.74
2000 1745.92
1000
0
Scenario A Scenario B Scenario C Scenario D Scenario E Scenario F
Figure
Figure 7.
7. Profits
Profits of
of thermal
thermal power
power generation
generation enterprise
enterprise in
in different scenarios.
different scenarios.
Discussion and Scenario Analysis

5. Discussion
Under thethesame
same external boundary
external boundaryconditions, the profits
conditions, of thermal
the profits of power
thermalgeneration enterprise
power generation
varied considerably in the different scenarios, as shown in Figure 7. Scenario A,
enterprise varied considerably in the different scenarios, as shown in Figure 7. Scenario A, with with a single profit
a
mode of
single power
profit modesales, produces
of power theproduces
sales, least profit,
thewhere L is 17.4592
least profit, wheremillion yuan.million yuan.
L is 17.4592
When the unit price of coal is too high, in addition to power sales, the thermal power generation
When the unit engages
enterprise actively price of coal is too generation
in power high, in addition
rights to powerwith
trading sales,clean
the thermal power generation
energy power generation
enterprise
enterprisesactively engages
in scenario B. Dueintopower
the lowgeneration
productionrights trading
cost of with clean
clean energy, energy power
the transaction pricegeneration
difference
enterprises in scenario B. Due to the low production cost of clean energy, the transaction
is much larger than the price difference between the on-grid electricity prices and the unit production price
difference is much
cost of thermal larger
power than the which
enterprise, price difference
produces between the on-grid
considerable electricity
incremental prices
revenue forand the unit
the thermal
power generation enterprise.
The thermal power generation enterprise participates in peak load regulation in scenarios C and
E. The difference is that the thermal power enterprise participates in two stages of deep peak load
regulation (with oil and without oil) simultaneously in scenario E, which reduces the sharing cost
and increases the compensation income of peak load regulation. The profits in scenario E increase by
0.1731 million yuan compared with scenario C. In the in-depth peak load regulation stage, where oil
injection is required to maintain combustion, although the oil injection cost and unit loss cost increase
further, the compensation price for peak load regulation is higher when P is within (Pmin , Pa ), which
can compensate for the increased cost of deep peak load regulation, and even produce a small amount
of profit. 2019, 11, x FOR PEER REVIEW
Sustainability 16 of 22
Scenario D assumes that Scenarios B and C occur concurrently. The thermal power enterprise
participates
D and F. This in shows
power that
generation rights trading
the diversified andmodel
business deep peak load regulation
proposed (without
in this paper oil) inability
has a better scenarioto
D; its profit
resist is higher
risks than than in
the single scenarios
business B andThe
model. C. The diversified
sensitivity business
coefficient model in
analysis creates
Tablehigher
2 showsprofits
that
for
the the thermal
average power generation
sensitivity coefficiententerprise.
of the profit to coal price is 16.93 and the average sensitivity
Scenario
coefficient F produces
of the the most
on-grid price profit.
is 27.76, Compared
indicating thatwith scenario
it was A, thetoprofit
reasonable selectofcoal
the price
two business
and on-
models differs by
grid electricity 21.7921
price million yuan.
as uncertainty Therefore,
factors the thermal power generation enterprises receive
for analysis.
higher profits with a diversified business model.
Table 2. Sensitivity
To better illustrate the adaptability coefficient
of the various analysis.
business models proposed in this article to
changes in the external environment, we conducted a sensitivity analysis of the profits in different
Sensitivity Coefficient of Profit to Sensitivity Coefficient of Profit to
scenarios. Scenario
Sensitivity analysis isCoal an uncertainty
Price analysis method
On-Gridcommonly
Electricity used
Price in economic
decision-making. By measuring the change range of the decision-making goal caused by the change in
A
one or more uncertain 27.80of influence of various factors on
factors, the degree 45.55
achieving the desired goal
can be determined. B Since about 70% of the
14.00 costs of the thermal power generation
22.94 enterprise is due to
coal burning, the profits are sensitive to the price of coal. The fluctuations in on-grid electricity tariff
C
also affect the profits of thermal power 18.94
generation enterprise. Therefore, the 31.06
unit price of standard coal
and on-grid electricity
D tariff were both11.04
selected as uncertain factors to analyze 18.11the impact on profits for
a thermal power generation enterprise.
E
Firstly, assuming 18.82unchanged, the impact of coal unit
other factors were 30.85price changes on profits
was analyzed.FWe selected the change proportions of the unit price of standard
11.00 18.03 coal as −10%, −5%,
5% and 10%, and then the profit value in each scenario with different coal prices was calculated using
the equations Average
in Section 3.3. The result 16.93
is shown in Figure 8. 27.76
8000.00
Unit:Ten Thousand Yuan
7000.00
6000.00
5000.00
4000.00
3000.00
2000.00
1000.00
0.00
-1000.00
-2000.00
-3000.00
-10% 6599.49 7473.81 7349.50 8223.81 7369.06 8243.38
-5% 4172.71 5294.06 4944.46 6065.81 4962.90 6084.26
Normal 1745.92 3114.32 2539.42 3907.82 2556.74 3925.13
5% -680.86 934.57 134.39 1749.82 150.58 1766.01
10% -3107.64 -1245.17 -2270.65 -408.17 -2255.58 -393.11
Figure 8.
Figure 8. The impact
The of changes
impact in the
of changes inunit
the price
unit of standard
price coal on coal
of standard the profits
on theinprofits
different
in operating
different
scenarios. scenarios.
operating
Figure 8 proves that the change in the unit price of standard coal has a reverse relationship with
profits, and increases in the price of coal produce a sharp decline in the profits of thermal power
generation enterprises. When the unit price of standard coal increases by 5%, the thermal power
generation enterprise in scenario A, with a single power sales mode, begins to lose money, and the
profits in other scenarios are still positive.
We then analyzed the impact of changes in on-grid electricity tariff on profits by assuming that
other factors were unchanged. The on-grid electricity tariff was also obtained with change proportions
of −10%, −5%, 5%, and 10%, and the profit value in each scenario with different change proportions
of on-grid electricity tariff were calculated using the equations in Section 3.3. The result is shown in
Figure 9.
12000.00 Unit:Ten Thousand Yuan

10000.00
8000.00
6000.00
4000.00
2000.00
0.00
-2000.00
-4000.00
-6000.00
-10% -6207.54 -4029.51 -5348.20 -3170.16 -5330.88 -3152.85
-5% -2230.81 -457.60 -1404.39 368.83 -1387.07 386.14
Normal 1745.92 3114.32 2539.42 3907.82 2556.74 3925.13
5% 5722.66 6686.23 6483.24 7446.81 6500.55 7464.13
10% 9699.39 10258.15 10427.05 10985.80 10444.36 11003.12
Figure 9.
9. The
Theimpact
impactofof changes
changes in on-grid
in on-grid electricity
electricity tariff
tariff on the on the in
profits profits in different
different operating operating
scenarios.
scenarios.
Figure 9 shows that a positive relationship exists between the change in on-grid electricity tariff
and the change due
Therefore, in profits.
to the The decline in
continuous on-gridinelectricity
increase new energy tariffs produces
installed a significant
capacity, as welldecline
as slowin
profits. When the on-grid electricity tariff decreases by 5%, the thermal power generation
growth of society’s power consumption, high coal prices, encouragement to protect the environment, enterprise
suffers
and thelosses underofscenarios
reduction A, B, C, andthermal
power generation, E, whilepower
the profit values are
generation still positive
enterprises under
have scenarios
to change D
their
and F. Thissingle
traditional showsbusiness
that the model.
diversified businessa model
We suggest changeproposed in this paper
into a diversified has model,
business a betterinvolving
ability to
resist risks
power than
sales, the single rights
generation business model.and
trading, The peak
sensitivity
load coefficient analysis inisTable
regulation—which more2 shows that the
conducive to
average sensitivity
mitigating the riskscoefficient of the
of external profit to coal changes,
environmental price is 16.93 and thethe
improving average sensitivity
operating coefficient
efficiency, and
of the on-grid
achieving price is 27.76,
sustainable indicating
development of that it was
thermal reasonable
power to select
generation coal price and on-grid electricity
enterprises.
price as uncertainty factors for analysis.
6. Conclusions
Table 2. Sensitivity coefficient analysis.
With the continuous increase in new energy installed capacity, the slowdown of social power
consumptionScenario Sensitivity
growth, the high Coefficient
coal prices, of Profit
and the reductionSensitivity
of on-gridCoefficient
electricityoftariff,
Profitwe used the
to Coal Price to On-Grid Electricity Price
cost–benefit analysis method to analyzed the costs and benefits of thermal power enterprises in the
operation process A in detail. This established
27.80 45.55 and decision model for
an operation benefit analysis
B 14.00 22.94
thermal power enterprises that includes four profit models: power sales, peak load regulation
C 18.94 31.06
(without oil), peak
D load regulation (with oil), and generation right trading.
11.04 18.11 The opportunity cost of
peak load regulation
E and generation rights
18.82 trading was considered. To demonstrate
30.85 the applicability
F
of the methods proposed 11.00the differences in the benefits 18.03
in this paper and of thermal power generation
Average
enterprises under 16.93 we combined the current operation
different business models, 27.76 of the power market,
aiming at the possible combination of business models, and introduced six specific business models
Therefore, due
for comparative to the Finally,
analysis. continuous increase inanalysis
an empirical new energy installed capacity,
was conducted as well
by selecting as slow growth
a thermal power
of society’sinpower
enterprise consumption,
Ningxia, Northwesthigh coalasprices,
China, encouragement
an example, to protect
which verified thatthe
theenvironment, and the
diversified business
model is better than the single power sales operation model for thermal power enterprises.
Thermal power generation enterprises with diversified business models can receive an
incremental income of 21.7921 million yuan in one year, which significantly improves the economic
benefits of the enterprises. This model is conducive to the sustainable development of the thermal
reduction of power generation, thermal power generation enterprises have to change their traditional
single business model. We suggest a change into a diversified business model, involving power sales,
generation rights trading, and peak load regulation—which is more conducive to mitigating the risks
of external environmental changes, improving the operating efficiency, and achieving sustainable
development of thermal power generation enterprises.
6. Conclusions
With the continuous increase in new energy installed capacity, the slowdown of social power
consumption growth, the high coal prices, and the reduction of on-grid electricity tariff, we used
the cost–benefit analysis method to analyzed the costs and benefits of thermal power enterprises in
the operation process in detail. This established an operation benefit analysis and decision model
for thermal power enterprises that includes four profit models: power sales, peak load regulation
(without oil), peak load regulation (with oil), and generation right trading. The opportunity cost of
peak load regulation and generation rights trading was considered. To demonstrate the applicability
of the methods proposed in this paper and the differences in the benefits of thermal power generation
enterprises under different business models, we combined the current operation of the power market,
aiming at the possible combination of business models, and introduced six specific business models
for comparative analysis. Finally, an empirical analysis was conducted by selecting a thermal power
enterprise in Ningxia, Northwest China, as an example, which verified that the diversified business
model is better than the single power sales operation model for thermal power enterprises.
Thermal power generation enterprises with diversified business models can receive an incremental
income of 21.7921 million yuan in one year, which significantly improves the economic benefits of the
enterprises. This model is conducive to the sustainable development of the thermal power industry.
Thermal power generation enterprises participating in power generation rights trading can promote new
energy consumption, and thermal power units conducting deep peak load regulation can reduce the
amount of abandoned wind power. This can promote new energy consumption of 337,473 MWh, and
the annual carbon dioxide emission can be reduced by 186,900 tons, producing social benefits. This will
also play a positive role in energy conservation, emission reduction, and environmental protection.
We used sensitivity analysis to analyze the impact of the change in external uncertainty factors,
such as coal price and on-grid electricity tariffs, on enterprise profits. The calculation results showed
that the diversified business model could help thermal power generation enterprises to more effectively
mitigate the risks of external environment change and achieve sustainable development.
Finally, the shortcoming of this model is that it only considers the combined scenarios of four
business models: power sales, peak load regulation (without oil), peak load regulation (with oil), and
generation rights trading. However, with advancing technology and the development of the external
power market, other business paths need to be solved in the future work, such as thermal energy sales,
energy saving, and consumption reducing service. In further research, we will continue to consider
more business paths in the diversified business model to produce more profits, and support sustainable
development for thermal power enterprises.
Author Contributions: All of the authors contributed to this research. X.Y. and M.C. collected the data and wrote
this paper; D.N. and X.X. provided professional guidance; K.W. and Q.W. revised this manuscript. All authors
have read and agreed to the published version of the manuscript.
Funding: This work was supported by the 2018 Key Projects of Philosophy and Social Sciences Research (grant
number 18JZD032), Ministry of Education, China; 111 Project (grant number B18021), Ministry of Science and
Technology of People’s Republic of China, China; Natural Science Foundation of China (grant number 71804045),
National Natural Science Foundation of China, China.
Acknowledgments: The completion of this paper was made possible with the help of many teachers and
classmates. We would like to express our gratitude to them for their guidance and assistance.
Conflicts of Interest: The authors declare no conflict of interest.
Appendix A
Table A1. Parameters setting details.
Parameter Value Details

a 0.000169
b 0.27601
c 11.46196
Citing references [43]
β1 1.2
β2 1.2
N (P) 0.005778P3 − 2.682P2 + 484.8P − 8411
Unit price of standard coal 514.15 yuan/ton Market price in 2018
On-grid electricity tariff of
259.5 yuan/MWh Market price in 2018
Thermal power
Price of oil 6130 yuan/ton Market price in 2018
The average price difference of
50 yuan/MWh Unit operation data
Power generation rights trading
Qplrs,max (P) 25,374 MWh Unit operation data
Qg 312,000 MWh Unit operation data
Notice on operation rules (Trial) of
ωplrs,1 0–0.38 yuan/kWh Ningxia electric power auxiliary service
market
ωplrs,2 0.38–0.95 yuan/kWh Ningxia electric power auxiliary service
market
Pa 40% Ningxia electric power auxiliary service
market
Pb 50% Ningxia electric power auxiliary service
market
The corrected quantity of Northwest China Energy Regulatory
5,829,820 MWh
electricity Bureau of National Energy
Administrator of the People’s
The total apportioned cost Republic of China.
113.79 million yuan
http://xbj.nea.gov.cn/website/Aastatic/
news-list-100300-100301.html
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Sustainability 2020, 12, 4642; doi:10.3390/su12114642 www.mdpi.com/journal/sustainability

Cumulative installed capacity（10^4kW） New installed capacity (10^4kW) Proportion

Cumulative installed capacity（10^4kW） New installed capacity (10^4kW) Proportion

Scenario Business Model

3.1. Income Analysis of Diversified Operation

3.1.1. Income of Power Sales

3.1.2. Income of Peak Load Regulation

3.1.3. Income of Generation Rights Trading

3.2. Cost Analysis of Diversified Operation

3.2.1. Cost of Power Production

C g (P) = Q g × ωon-grid − ωcoal × F(P) × Ts − Q g × Cother (11)

3.3. Objective Functions and Constraints

4.1. Background Introduction

4.2. Model Parameters

The operating loss coefficient

oil consumption ofThe

Cost Sharing (Unit: Ten Thousand Yuan） Growth Rate

calculated as 39.0782 million yuan.

Unit: Ten Thousand Yuan

Discussion and Scenario Analysis

12000.00 Unit:Ten Thousand Yuan

Table A1. Parameters setting details.

Parameter Value Details

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