## 4 Case Study and Economic Analysis
### Multi-Angle Economic Analysis  
#### 4.3.1 Economy of Thermal Power Plants in Peak Shaving  
Referring to the costs defined in Section 3, Figures 7 and 8 separately illustrate the coal consumption cost, wear-and-tear cost, combustion supporting cost (oil cost and plasma ignition cost), and environmental cost of UPI and UOI per MWh at different peak shaving level and Tables A3 and A4 give the sub-item cost ($). As peak-shaving level increases, the wear-and-tear cost, combustion supporting cost, environmental cost, and coal consumption cost of both UPI and UOI are raised. For combustion supporting cost, since UPI substitute the oil combustion by coal combustion in DPSC stages and the extra coal consumption cost is only one-third of the oil cost, the UPI has a much lower plasma ignition cost than the oil cost of UOI. Because the boiler combustion efficiency reduced with the load rate decreased, the coal consumption cost per MWh increased. For the coal consumption cost of UPI during DPSC, it is a little bit higher than that of UOI because of the extra coal consumption of UPI. Further, during the ignition, the electrostatic precipitation and desulfurization device can be put into use for UPI to greatly reduce the pollutant emission, and therefore the environmental cost of UPI is much lower than that of UOI.  
The marginal prices of coal-fired units in case 1 and case 2, as shown in Figure 9, increases significantly during DPSW and DPSC period. But the marginal price of case 1 is 3% or 5% lower than that of case 2 at the peak-shaving level at 55% or 65%, which indicates that the UPI in case 1 presents better economic benefits than UOI in case 2 during DPSW and DPSC period.  
We further investigated the marginal price with consideration of peak shaving compensations. As specified by the \"Implementation Rules for the Management of Auxiliary Services for Grid-Connected Power Plants in North China\", the reduced amount of electricity for the deep peak-shaving units will be compensated by the government (only for peak-shaving level deeper than 50%). The peak shaving compensation can be calculated as follows  
\[C_{com}=(E_{R}-E_{D})S_{com} \tag{19}\]  
where \(E_{R}\) is the power generation under the condition all units do not engage in deep peak shaving; \(E_{D}\) is the power generation during DPSW and DPSC stages; \(S_{com}\) is the compensation price and settled as \(S_{com}=37.2\) $/(MWh) according to [35]. Then, the marginal price with compensation could be refined as  
\[V^{\prime}_{m}=V_{m}-\frac{C_{com}}{E_{c}}. \tag{20}\]  
When counting the compensation in, the refined marginal prices of UPI and UOI both drops about 3% and 4% during DPSW and DPSC. But for UPI in case 1, its marginal price at peak-shaving level of 55% and 65% is, respectively, 2% and 6% higher than that at the level of 45%. For UOI in case  
Figure 8: Sub-item costs of UOI. Figure 9: Marginal price of UPI and UOI. 2, its marginal price at the level of 55% and 65% is, respectively, 2% and 9% higher than that at the level of 45%, which means the monetary compensation for UPI and UOI cannot cover the increased generation cost of participating in deep peak shaving. In recent years, in order to encourage coal-fired units to actively take part in deep peak shaving, China has continuously lifted the compensation price for the reduced power generation during the peak shaving process. Taking North China as an example, the Regional Regulatory Authority of The National Energy Administration first raised the compensation price from 7.44 $/(MWh) to 37.2 $/(MWh) in January 2017. Later, in December 2018, it released \"Notice on Printing and Distributing the Operating Rules of North China Peak-shaving Service Market (Trial Version)\". In this notice, the price for peak-shaving service is offered by the service provider, and the service fee is shared by the party who benefits from peak-shaving services (wind power plants and PV power stations, for example).