# Assessment of Air-Pollution Control Policy's Impact on China's PV Power: A System Dynamics Analysis
## 2 Air-Pollution Control Policy
### Analysis of Air-Pollution Policy Contents  
In September 2013, China's state council issued _The Action Plan for the Control of Air Pollution_. It pointed out several measures which can influence PV industry: (1) encourage electric power replacement; (2) restrict new coal-fired power generation project; (3) set non-fossil fuel energy share target in 2017 as 13%; (4) stimulate renewable energy generation; (5) limit high energy consumption industry; (6) promote green building with distributed rooftop PV installation; (7) improve price mechanism of renewable energy generation. These policies measures will undoubtedly increase the share of non-fossil fuel energy, and bring about uncertainty to electricity consumption.  
In March 2014, the National Energy Administration (NEA) issued _Energy Industry's Action Plan for Strengthening Air Pollution Control_, which formulated several measures to support _The Action Plan for the Control of Air Pollution_ on energy industrial level: (1) set PV power as an important development direction for energy industry; (2) set targets for installed PV capacity and distributed PV installed capacity; (3) outline the 'feed PV power to grid after self-consumption' principle for the development of distributed PV power; (4) set the target of proportion of coal consumption in total energy consumption in 2017 as 65%; (5) set target for interregional power transmission; (6) improve subsidy mechanism of distributed renewable energy generation. These measures provided PV power with good opportunity and great challenge.  
In December 2014, the National Development and Reform Commission (NDRC) issued other supporting policy _Interim Regulations for Reducing and Replacing Coal Consumption_. Its measures, which can influence PV power including: (1) set coal consumption reduction target; (2) close down backward production facilities; (3) accelerate power grids construction.  
In July 2013, the state council issued _Some Suggestions to Improving PV Industry Development_ to make sure PV power will make great contribution to air-pollution control. This policy is first proposed at the executive meeting of the state council on February 12 as a supporting policy of _The Action Plan for the Control of Air Pollution_, and formally announced a little earlier than _The Action Plan_. It (1) set benchmark prices for different PV resource areas; (2) set whole electricity subsidy (0.42 CNY/kWh before 2020) and purchase mechanism for distributed PV power; (3) free self-consumption electricity of distributed PV system from all taxes and fees levied along with electricity price; (4) accelerate technology advancement to increase utilization hours and reduce cost.  
In general, air-pollution control policy on national level will indirectly affect PV industry by promoting electric power replacement and energy structure adjustment. In addition, air-pollution control policies on energy industrial level will indirectly stimulate PV industry by restricting coal consumption and setting it as an important development direction. These policies together with PV power stimulating policies constitute the framework of air-pollution control policy in this paper, to ensure PV power will give a boost to air-pollution control. The specific effects of policy measures on PV industry are shown in Figure 2.  
Because of the uncertainties China's PV power will face, it is of great significant to figure out how China's PV power will be affected by these 'air-pollution' control policies. Considering its advantages on integrity and dynamics during the complex analysis, this paper plans to establish a SD model with different parameter settings, which can be determined by the policy analyses mentioned above, to  
Figure 1: Policy Framework.  
simulate the development of China's PV industry in different policy scenarios. Further, comparing the differences between simulation results in different policy scenarios can help us assess the effect of air-pollution control policy on China's PV industry.