The effects of CCUS combined with renewable energy penetration under the carbon peak by an SD-CGE model: Evidence from China.

• Reveal the complex mechanism in coupling developing CCUS and renewable energy. • Assess the economic effects of CCUS and renewable energy penetration by a CGE model. • Identify the optimal policy intensity to deploy CCUS and renewable energy in power sector. • Explore the impact of CCUS application on carbon peak in China's new power system. • Building a green energy dominated power system is harder than the carbon peak target. Carbon capture, utilization, and storage (CCUS) is identified as a critical decarbonization technology that is expected to be applied globally on a large scale, especially in a thermal power-dominated power system. To achieve a carbon peak in the power sector, assessing the environmental and economic effects, including the costs of CCUS application and the decarbonization efficiency, is essential for making a reasonable CCUS policy. However, there is still a research gap in identifying the proper CCUS application intensity considering the dynamic changing renewable energy percentage and power quantity. Therefore, this study constructs a "dynamic system- computable general equilibrium" (SD-CGE) model to reveal the industrial and macro impacts of CCUS application policies by comprehensively evaluating the social, economic, and environmental effects of CCUS application scenarios where different policy intensities are set. Using China as a typical case, the results show that, first, the policy of applying CCUS combined with renewable energy penetration will contribute to reaching the power sector's carbon peak, however, building a new power system dominated by green power is a more challenging goal. Second, regarding the CCUS application intensity combined with renewable power penetration rate, it is proper to suggest setting the policy intensity as "medium-medium" for the optimal environmental and economic effects. Consequently, the power sector's carbon peak year will be 2025, while green power will dominate the power supply in 2030. Third, through the model's validation check, the models and results in this study are shown to be accurate and robust. This study provides policy support for constructing China's new power system, is conducive to achieving the national carbon peak goal, and provides other countries with theoretical tools to study similar problems. [ABSTRACT FROM AUTHOR]