This paper proposes a CO
2 reduction surcharge which is charged proportional to customers’ CO
2 emission, instead of FIT surcharge proportional to the grid power consumption. When this new surcharge is slightly over 10,000yen/ton-CO
2, the operating unit cost of coal fired plants is over that of LNGCC plants, and the capacity factor decreases as well as CO
2 emission. Authors simulated a power system in 2030 where a large amount of PV is implemented and the 18% of PV generated energy must be curtailed. The annual cost is minimized by optimizing LNGCC and battery energy storage systems (BESSs) capacity, hourly output of coal fired and LNGCC plants, hourly charge and discharge power of BESSs, and PV curtailment. Results show this surcharge is effective to change fuel and decrease CO
2 emission, and BESSs moderate this fuel change but decrease PV curtailment and CO
2 emission. The energy chain including whole power system, demand and fuel is analyzed to see the power flow and CO
2 emission. It is also discussed to apply this surcharge to every fossil fuel usage in order to realize the almost CO
2 free society with a reasonable cost increase.
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