A study on electricity price subsidy mechanism of biomass based power generation of China

In the background of global financial crisis and abnormal climate, low-carbon economy has become an optimal choice for the sustainable development of all countries. The biomass based power generation industry is an important way of developing low-carbon economy as well as a way of improving the energy structure of China. At present, the biggest problems of biomass based power generation industry in China are the lack of marketing mechanism, the incomplete price incentives including government subsidies for biomass based power generation, as well as the imperfect pricing mechanism of biomass based power generation. Based on analysis of industrial chain of biomass based power generation, this paper uses mechanism design theory to analyze the electricity price subsidies for biomass based power generation industry. We build an electricity price subsidy model to analyze the mechanism of how the related factors influencing each other and put forward some policy suggestions for electricity price subsidies for biomass energy power generation industry.