A System Dynamics Model to Assess the Effectiveness of Governmental Support Policies for Renewable Electricity

Round  1

Reviewer 1 Report

Title: Is China’ policy of biomass power generation rational: Techno-economic analysis of a biomass-based power plant in Jingning County, Gansu Province

General Comments:

I have reservation about the paper suitability for the scope of this journal, Sustainability. The title expresses two views/ideas (providing a confusing notion about this article). Writing is a poor and bad flow of ideas. The authors failed to connect the circularity, system dynamics model and techno-economic analysis. Assumptions and input to the model are missing or not properly articulated. Method section has serious technical flaws, especially techno-economic analysis, and greenhouse emissions saving (formula 11: they assume emissions from the power plant is zero as data is not available). Poor presentation of results and discussions.  

The detailed comments are mentioned below as well as in the attached document.

Title:

The title is confusing. Please revise it.

Abstract:

·       Poor writing of the abstract, especially towards the end.

·       Starting of the abstract looks odd and does not provide a good impression of this article.

·       Provide a strong rationale for this research.

·       The methodology is not clear.

·       Provide major drawbacks and future scope of this current research.

Introduction:

·       Poor introduction section. Lack of flows of ideas. Authors must make a story in the introduction section which discusses the current situations, problem descriptions, previously published articles about the problem, identify the gaps and mention how that is going to address the problem (i.e., their approach).

·       It was difficult to understand why authors directly started with the circular economy.

·       Can you mention the connection between system dynamics model and techno-economic analysis?

Material and methodology:

·       The estimation of GHG saving is wrong and compromised (as the author mention that the lifecycle emission intensity of biomass is unknown). This is a serious issue. Either you estimate based on published papers data or use published lifecycle emissions data for biomass or don’t present the greenhouse gas saving here.

·       Serious issue with the Techno-economic analysis of power plant. The method presented in this manuscript is not acceptable. They must provide various assumptions and input data in the methodology section for Techno-economic analysis. They don’t have to mention the formulas. Economic analysis formulas are pretty standard and nothing unique here.

·       Similarly, the description of the system dynamics model is flawed and nothing new presented here.

Results:

·       Poor description of the results. What new information figure 7 provides. Anyone can draw this figure. The authors must explain: How they arrived with these results?  what are the results means to the audience? Just mentioning you got these results to make no sense to a reader.

·       Same issue with section 3.2. Without sound methodology and credible inputs and assumptions, these results are not worthy. Moreover, the presentation is of low quality.

·       All results sections must be revised.

Comments for author File: Comments.pdf

Author Response

Title:

The title is confusing. Please revise it.

New title: A System dynamics model to judge whether or not the positive externality generated by a biomass power plant has been internalized

Abstract:

·       Poor writing of the abstract, especially towards the end.

·       Starting of the abstract looks odd and does not provide a good impression of this article.

·       Provide a strong rationale for this research.

·       The methodology is not clear.

·       Provide major drawbacks and future scope of this current research.

Answer: In response to the suggestions mentioned above, we re-write the abstract section, pay more attention to descript paper’s methodology and highlight the main conclusions of the study.

Introduction:

·       Poor introduction section. Lack of flows of ideas. Authors must make a story in the introduction section which discusses the current situations, problem descriptions, previously published articles about the problem, identify the gaps and mention how that is going to address the problem (i.e., their approach).

Answer: the section of literature review was organized again, added some latest paper, emphasized the practical significance of the method of externality internalization in evaluating the Feed-in Tariffs scheme policy.

·       It was difficult to understand why authors directly started with the circular economy.

Answer: In the original paper, we hold an idea that biomass power generation is a type of circular economy. Circular economy has a characteristic of externality, so we can apply the method of externality internalization to analyze the rationality of governmental supportive policy. It indeed exists the problem of logic failure. In revised manuscript, this section has been improved.

·       Can you mention the connection between system dynamics model and techno-economic analysis?

Answer: The method of techno-economic analysis is applied to explore the conditions that enable biomass power generation companies to operation without loss. The method of environmental cost accounting is applied to assess the positive externality of biomass power generation. Many parameters are used by these two methods simultaneously. We can unite these two methods by building a system dynamics model. The advantage of the system dynamics model is that it reproduces real-world complex systems with limited metrics on the computer desktop with the help of a computer software. We can observe the variation law of system behavior by adjusting some key parameters, judge the impact of these parameters on the operation of the whole system, and provide ideas for evaluating the rationality of current policies.

Material and methodology:

·       The estimation of GHG saving is wrong and compromised (as the author mention that the lifecycle emission intensity of biomass is unknown). This is a serious issue. Either you estimate based on published papers data or use published lifecycle emissions data for biomass or don’t present the greenhouse gas saving here.

Answer: This problem has been solved. All parameters used to calculate the emission reduction of pollutants has been found in several latest literatures.

·       Serious issue with the Techno-economic analysis of power plant. The method presented in this manuscript is not acceptable. They must provide various assumptions and input data in the methodology section for Techno-economic analysis. They don’t have to mention the formulas. Economic analysis formulas are pretty standard and nothing unique here.

Answer: We found a problem through examining the model several times. It exists a loophole in the net present value analysis module, and the problem has been solved.

There are many parameters in the system dynamics model. Some of the key parameters are important for the analysis of the problem. By observing the influence of the changes of these key parameters in the system, we can obtain significant information conducive to solving our problem.

·       Similarly, the description of the system dynamics model is flawed and nothing new presented here.

We check our system dynamics model several times, delete some redundancy auxiliary variables.

Results:

·       Poor description of the results. What new information figure 7 provides. Anyone can draw this figure. The authors must explain: How they arrived with these results?  what are the results means to the audience? Just mentioning you got these results to make no sense to a reader.

Answer: The original conclusion is indeed a bit vague, and we have made a substantial revision.

·       Same issue with section 3.2. Without sound methodology and credible inputs and assumptions, these results are not worthy. Moreover, the presentation is of low quality.

Answer: This section has also been improved.

·       All results sections must be revised. 

Answer: We draw conclusion that the scale of government subsidies far exceeds the positive externalities that biomass power generation can generate in original manuscript. But this conclusion has been overthrown now, we found that China's current supportive policy does not provide excessive subsidies for the renewable power industry. The subsidies received by the biomass power plants from the government are still lower than the positive externality generated by them. We owe this change to the calculation of the environmental loss of several pollutants emissions. We did not absorb the environmental values of CO emission reduction and NOx emission reduction into the positive externality of biomass power generation. The positive externality scale increase drastically and exceeds the fiscal subsidies received from government by biomass power plant when this two section are absorbed into its positive externality.

Author Response File: Author Response.docx

Reviewer 2 Report

Attached as a file

Comments for author File: Comments.pdf

Author Response

 Major items

1. It is not very clear why you picked those six scenarios and what each of them represents.

a. There must be a separate paragraph explaining scenarios (also with Table 6), which should be in the method chapter (not in the result section).

b. E.g. 0.75CNY/kWh (in I and II) is the current price, but then where is 0.30 (III to VI) from or what does it mean? It can be thought as the price level without gov support, but coal electricity is between 0.27 and 0.47 according to the text? Why 0.30?

My answer: This part has been put in the method section. we introduce the six scenarios under that table. As far as desulfurized coal-fired electricity in Gansu Province is concerned, the purchase price of the State Grid Corporation of China is about 0.30 Yuan/kWh, then the price subsidy for biomass power generation is 0.45 Yuan/kWh.

2. Some important terms are not clearly defined or not emphasized enough.

a. ‘support policy’: I see it is explained in 3.3.1 what those policies are. But it kept being mentioned many times even before 3.3.1. Bring it forward to introduction or method.

b. ‘fiscal subsidy’: Please define it in this specific case and specify which items are included in it.

i. I guessed the difference between the price of 0.75 and 0.3 for the biomass power is a part of the subsidy. But I see it is separate from the ‘support policy’ row in Table 6. Is it a part of the subsidy or not?

ii. Line 475-476: It should explain how ‘the fiscal subsidy provided by the government’ is calculated.

iii. And clearly present how much the fiscal subsidy values are for each

Answer: In this study, governmental fiscal subsidy includes two parts: price subsidy and support policy. we provide several equations to demonstrate their relation, and how they are calculated.

3. The conclusion is a bit too vague.

a. What does it mean by ‘reducing policy support’ or ‘adjusting support’?

i. My understanding is that it is aiming for making the gap equal to zero?

b. It is hard to understand how the latter half of the conclusion is directly derived from the analysis.

Answer: The original conclusion is indeed a bit vague, and we have made a substantial revisions.

4. It will be helpful for readers to show breakdowns of different elements of externalities and compare the relative sizes of those elements across scenarios.

Answer: in section 2.1,2.2，We explain the components of externalities and government subsidies in detail, and in the results section, we compare the sizes of their components in figure.

5. On the first page, when it mentions “no universally accepted method for assessing the effect of the transition from a traditional economy to a circular economy, nor is there a comprehensive monitoring tool”, I was guessing that this article would do something about this issue, but it actually doesn’t. This statement is confusing and not really necessary.

Answer: yes, that statement is not really necessary, and it has been deleted.

6. I don’t quite get the structure of the methodology chapter. Section 2.1 describes the social benefits, while environmental benefits are separately formulated in 2.3.6 and afterwards. I suggest starting with a clear list of externality items at the beginning (both social and environmental); to explain how each item is quantified/formulated for your analysis (equations); to talk about the metrics and financial quantities for assessing the biomass plant (currently 2.3); and then to have the description of the model (2.2).

a. When it comes to the list of externality items, there is one at the beginning of 2.1 (line 192-194), which is less comprehensive/detailed than what I see on line 488-495. Please combine them and clearly present it once at the beginning

Answer: Tthe methodology chapter has been edited again. the components of positive externality has been put together and the relations between every item of externalities are explained using several equations.

7. There are mentions about CDM, which is not explained at all in the text.

a. Line 494: It is not clear what it means by ‘the benefit of the CDM’, but if it means the cash flow from sales of CER of a CDM project, it is not an externality, since it is taken into account in the economic decision (as shown in Figure 6).

Answer: Explanation of CDM has been inserted into the corresponding paragraph. The benefit of the CDM means the benefit   obtained by biomass power plant from sales of CER of a CDM project. Meantime, it indicates that the positive externality of CO2 emission reduction has been internalized. this indicator can also been viewed as the market price of CO2 emission reduction if the biomass power plant cannot be absorbed into CDM project. Based on above idea, we recheck the logical  relations among indicators involved.

8. It wasn’t very clear to me why the time series shows such trends (e.g. Figure 9) over the years. It will be preferable to clarify what’s changing over the years.

Answer:The curves in Fig.9 present a similar developing trend, which indicates that the indicator’s values are small from 2019 to 2024, and become bigger gradually after 2025. Because that the value of positive externality of biomass power generation is relatively stable, the value of “gap between the fiscal subsidy and the positive externalities” mainly depends on the value of fiscal subsidy. Therefore, the indicator curves in Fig.9 illustrate that the support intensity of government’s policy is larger at the first six years, and then its support intensity becomes weak, so the values of this indicator in two scenarios grow bigger and bigger.

Minor items

1. Please fix the format/fit of Table 1.

2. Line 192: Equation (1) is not about increased income. Eqn (2) is.

3. Line 195: Eqn (1) is only a part of externality, while it says “We calculate the externality produced by biomass power generation as follows:”

4. Section 2.2: For the readers who are new to system dynamics model, please explain different symbols in the model diagram (e.g. <>, rectangles, circles, different arrows) and the definitions of basic terms like level/rate/auxiliary variables.

5. Line 501: ‘see Fig. 9’ for CDM? Please check out the numbering of the figures.

6. Fix Indentation of Section 4.

7. Line 509: Figure 9 instead of 8?

Answer: Minor items mentioned above have been improved according to your suggestion.

Author Response File: Author Response.docx

Reviewer 3 Report

- Line 96 pag. 3: It is better to use square km instead of acres

- Apple tree branches are rich of lignin so they are very difficult to digest in anaerobic digestion plants to produce biogas. For further details about biogas plant a recent paper is available (Italian biogas plants: trend, subsidies, cost, biogas composition and engine emissions) and considers the Italian case.

Check it and try to understand if the Italian experience (not really good) on biogas and renewables can be useful.

- Line 137 pag. 3: "The poverty rate, which is the proportion of poor people to all people in the rural areas, reached 59.6% in 1986". Please, provide a more recent value because from 1986 to now, the situation is changed.

- Line 142 pag. 3: correct county with country

- Table 1: provide the unit of measurements.

- Line 165-166 pag. 4: this part is repeated (see, e.g., line 77).

- Line 173: CHY/KWh? please, also adds values in US dollars. Note that KWh is written in the wrong way! The correct one is kWh!

- Line 176-177: this is not true! Also, developed countries are looking again to biomass as important energy source! Take a look again to the paper titled "Italian biogas plants: trend, subsidies, cost, biogas composition and engine emissions" or https://doi.org/10.3390/en10030327.

- Line 296: "has been adapted" probably it is has been adopted.
- Computations about power plant design listed in Table 2 need to be better explained.

- In my opinion, the method adopted to design the system is questionable because, after biomass potential evaluation and related collection capacity, it is possible to compute the biomass boiler power and, consequently, the hourly biomass flow rate which guarantees a certain number of operation hours (e.g. 7000 hours per years).

Estimating a biomass boiler operating hours of 8000 hours is not feasible.

- Figure 7: which is the meaning of 376?

- Results are not meaningful. It is also not clear why the authors performed the present study and what they want to demonstrate.

Please, to demonstrate that biomass unit is a good option especially if they are fed with apple trees branches, prove that other researchers have not explore that possibility!

Author Response

Comments and Suggestions for Authors

- Line 96 pag. 3: It is better to use square km instead of acres

Answer: acres has been turned to square km.

- Apple tree branches are rich of lignin so they are very difficult to digest in anaerobic digestion plants to produce biogas. For further details about biogas plant a recent paper is available (Italian biogas plants: trend, subsidies, cost, biogas composition and engine emissions) and considers the Italian case.

Answer: Thank you very much. The literature has been cited in the paper.

Check it and try to understand if the Italian experience (not really good) on biogas and renewables can be useful.

- Line 137 pag. 3: "The poverty rate, which is the proportion of poor people to all people in the rural areas, reached 59.6% in 1986". Please, provide a more recent value because from 1986 to now, the situation is changed.

Answer: The latest value has been inserted in that paragraph.

- Line 142 pag. 3: correct county with country

Answer: County is a type of administrative region in China. It cannot be replaced by country.

- Table 1: provide the unit of measurements.

Answer: their units was listed in column 3.

- Line 165-166 pag. 4: this part is repeated (see, e.g., line 77).

Anser: I deleted it.

- Line 173: CHY/KWh? please, also adds values in US dollars. Note that KWh is written in the wrong way! The correct one is kWh!

Answer: In English literature, Yuan (Chinese Yuan) are often used. I replaced CNY with Yuan. Thank you, kWh is the correct formation.

- Line 176-177: this is not true! Also, developed countries are looking again to biomass as important energy source! Take a look again to the paper titled "Italian biogas plants: trend, subsidies, cost, biogas composition and engine emissions" or https://doi.org/10.3390/en10030327.

Answer: the region I refered to in paper is relatively developed regions in China, not developed countries in the world.

- Line 296: "has been adapted" probably it is has been adopted.
- Computations about power plant design listed in Table 2 need to be better explained.

Answer: I will improve this section.

- In my opinion, the method adopted to design the system is questionable because, after biomass potential evaluation and related collection capacity, it is possible to compute the biomass boiler power and, consequently, the hourly biomass flow rate which guarantees a certain number of operation hours (e.g. 7000 hours per years).

Answer:I examined table 2, hours of operation is indeed wrong, 8000 should be replaced by 7000, thus it can match the designed boiler and turbine of the 30MWh plant.

Estimating a biomass boiler operating hours of 8000 hours is not feasible.

- Figure 7: which is the meaning of 376?

Answer: To illustrate the relationship between the biomass price and the economic feasibility of the assumed project, we marked the biomass price in the figure legend; for example, Scenario I 376 indicates that all data presented in the figure is calculated based on an assumption that the biomass price is 376 Yuan/ton in Scenario I.

- Results are not meaningful. It is also not clear why the authors performed the present study and what they want to demonstrate.

Answer: The original conclusion is indeed a bit vague, and we have made a substantial revision.

Please, to demonstrate that biomass unit is a good option especially if they are fed with apple trees branches, prove that other researchers have not explore that possibility!

Answer: Studies on the utilization of apple branches are covered in the literature review section. The apple main production areas are geographically concentrated, and few scholars focus on the problems of apple branch utilization.

Author Response File: Author Response.docx

Round  2

Reviewer 1 Report

Authors had revised the manuscript substantially and coming better now. However, this manuscript requires more revisions and answer more questions raised below. Authors must create a section or index table for putting all notations and their explanation. Authors must add quantitative results to the abstract and add major drawbacks of this study. They must add a section dedicated to the limitations of this study. It may be better to do some sensitivity and uncertainty analysis also. Better to convert all results in US dollar. 

More comments are below.  

Why results have changed from the previous version:

Previous version: "Comparing the scale of the positive externalities of biomass power generation with the scale of government subsidies, we believe that the scale of government subsidies far exceeds the positive externalities that biomass power generation can generate"

Revised version: "Firstly, China's current supportive policy does not provide excessive subsidies for the renewable power industry. The subsidies received by the biomass power plants from the government are still lower than the positive externality generated by them"

Any reason for the change in the results between two versions of the manuscript. 

-Revise the title to provide a concise and clear idea about the work. A tile should be simple and 

Abstract:

More than half is to justify the rationale. Rest doesn't have enough results. Please include quantitative results. Break the five lines long methodology into smaller sentences. 

Introduction:

-Define positive externalities, in brief, to educate readers about it. 

Introduction:

-Define and explain in depth about positive externalities, internalization of externalities, etc.  and provide sufficient literature on them. 

Methods:

- Problem with figure 1. Edit it properly. part of it not visible. 

-Create a table to define all notations used in equations and their explanation.

-Please check boiler efficiency used in Table 3. 92% looks extremely high.  

-Merge equations 15 and 17. 

-A lot of formatting errors, for example, fine 593

Results:

-It may be better to convert economic values to the US dollar than yuan. So that the results produced here can be compared to other published studies for veracity and reliability.

Author Response

Authors had revised the manuscript substantially and coming better now. However, this manuscript requires more revisions and answer more questions raised below. Authors must create a section or index table for putting all notations and their explanation. Authors must add quantitative results to the abstract and add major drawbacks of this study. They must add a section dedicated to the limitations of this study. It may be better to do some sensitivity and uncertainty analysis also. Better to convert all results in US dollar. 

Answer: We have revised our paper according to your suggestions mentioned above.

More comments are below.  

Why results have changed from the previous version:

Previous version: "Comparing the scale of the positive externalities of biomass power generation with the scale of government subsidies, we believe that the scale of government subsidies far exceeds the positive externalities that biomass power generation can generate"

Revised version: "Firstly, China's current supportive policy does not provide excessive subsidies for the renewable power industry. The subsidies received by the biomass power plants from the government are still lower than the positive externality generated by them"

Any reason for the change in the results between two versions of the manuscript. 

Answer: I am ashamed that we made a serious mistake in the calculation of positive environmental externality. Compared with the previous version, we incorporate several indicators into the calculation of positive environmental externality, such as the environmental value calculation of nitrogen oxides emission reduction of biomass power and so on. But it is a pity that the position of decimal point was put in a wrong place in the process of indicator's units transformation. So the price of emission reduction is much higher than its true value. As a result, the calculated positive environmental externalities are greatly improved, and exceed government’s fiscal subsidy. We have corrected this mistake, now we hold that our previous version’s conclusion is right.

-Revise the title to provide a concise and clear idea about the work. A tile should be simple and 

Answer: revised title: A system dynamics model to assess the effectiveness of governmental support policies for renewable electricity

Abstract:

More than half is to justify the rationale. Rest doesn't have enough results. Please include quantitative results. Break the five lines long methodology into smaller sentences. 

Answer: We add quantitative results into abstract.

Introduction:

-Define positive externalities, in brief, to educate readers about it. 

Introduction:

-Define and explain in depth about positive externalities, internalization of externalities, etc.  and provide sufficient literature on them. 

Answer: Content of positive externalities has been added into corresponding place.

Methods:

- Problem with figure 1. Edit it properly. part of it not visible. 

Answer: It has been revised.

-Create a table to define all notations used in equations and their explanation.

Answer：This type of table has been created.

-Please check boiler efficiency used in Table 3. 92% looks extremely high.  

Answer: The value of boiler efficiency is in the normal range. Generally speaking, boiler’s thermal efficiency depends on its type, the bigger the boiler, the higher the thermal efficiency. It is reported by a Chinese journal named China Science and Technological Information published in Mar 2016 that the expected thermal efficiency of 25 MW biomass direct combustion power generation boiler (according to generation capacity of biomass power plants, the types of biomass direct combustion power generation boilers can be divided into several grade such as 6MW, 12MW, 25MW, and so on) is higher than 91 percent.

-Merge equations 15 and 17. 

Answer: The three equations is hard to merge. Every equation plays a independent role in the calculation of the pollutant emission reduction of biomass power generation.

-A lot of formatting errors, for example, fine 593

Answer: it has been revised.

Results:

-It may be better to convert economic values to the US dollar than yuan. So that the results produced here can be compared to other published studies for veracity and reliability. 

It may be better to convert economic values to the US dollar than yuan.

Answer: All economic values have been converted into US dollars

Author Response File: Author Response.pdf

Reviewer 3 Report

Author Response

    Thank you for your suggestions for the revision of the paper. I will further polish the language of the paper according to your suggestions.

Author Response File: Author Response.pdf