# Assessment of Air-Pollution Control Policy's Impact on China's PV Power: A System Dynamics Analysis
## 4 Simulation Results and Analysis
### Simulation Results in Different Policy Scenarios
#### 4.1.2 Scenario 2: With Influence of Fundamental Policy  
In Scenario 2, China's PV power industry will develop with the influence of fundamental air-pollution control policy. Stimulated by this policy, China's industrial structure will be more reasonable, and energy intensity will be lower as well. Further, this policy will reduce the proportion of coal consumption in total energy consumption to 65%. In consequence, thermal power generation will be about 10% less than that in Scenario 1. Non-fossil energy including PV power will get steady growth. In 2020 China's PV power generation will be 260.89 billion kWh accounting for 3.72% of total power generation. After reaching its peak at 294.11 billion kWh in 2023, it will start to decline slowly because of the more rapid rise of nuclear and other clean power. In addition, without supporting policies, the proportion of PV power generation will start to drop from the peak in 2017 (4.06%), and will probably drop to the same level in Scenario 1.  
Installed PV capacity will reach 131,229 MW in 2020, and reach 266,141 MW in 2025, which is not much higher than the simulations in Scenario 1. In order to relief the pressure of PV power curtailment, fundamental air-pollution control policy plans to enhance the construction of interregional transmission lines. However, without the supporting polices, which make plans for transmission lines to realize large-scale interregional electricity transmission, PV power curtailment will still stay at a high level in Scenario 2. At the end of our simulation, PV power curtailment will reach up to 29.28% with a rising trend.  
In Scenario 2, the increase of generation will stimulate the investments of both distributed PV power and PV power plant. Although benchmark price and price subsidy are still not enough, the investment enthusiasm of PV power will be much higher than that in Scenario 1. In addition, the increasing rate of distributed PV installed capacity will be accelerated since 2015. In 2020, distributed PV installed capacity will be 67,262 MW, which exceeds the policy target (40,000 MW), accounting for 51.26% of total installed PV capacity. However, its increasing rate will slow down since 2021 as the end of electricity price subsidy of distributed PV power. Different from distributed PV power, the increasing rate of PV plant installed capacity will maintain at about 20%, because the benchmark price of PV power plant will remain stable. Thus, the proportion of distributed PV power will begin to drop since 2022. By 2025, distributed PV installed capacity will reach 121,293 MW, accounting for 45.57% of total installed PV capacity. At that time, distributed PV power generation will reach 128.31 billion kWh, and PV plant power generation will reach 147.85 billion kWh. The simulated results of all state variables and some important auxiliary variables in Scenario 2 are shown in Table 15.  
In general, with fundamental air-pollution control policy, China can have a more reasonable energy structure. However, without relevant supporting policies, PV power will have lower competitiveness compared with other clean powers, which have obvious cost advantage. In this policy scenario, both distributed PV power and PV power plant will overly dependent on subsidies. Thus, the development of distributed PV power will slow down in 2021 as the end of electricity price subsidy. China's PV power still needs long-term subsidy unless technical and power transmission problem can be overcome. However, the subsidy will undoubtedly bring huge financial pressure to Chinese government.