Economic analysis and policy suggestions on gas power generation projects considering carbon emission reduction

China's primary energy consumption structure is primarily dominated by coal, and due to the excessive dependence on coal, China is facing enormous pressure in improving the power generation structure and enhancing clean energy utilization. There is growing recognition that, as the efficient clean energy, the higher proportion of natural gas plays an important role in improving the energy structure and carbon mitigation. This paper briefly introduces the current situation of carbon trade in power sector, and proposes an analytical model of gas power generation projects considering the carbon emission reduction value. For the integrated analysis presented in this article, we used the software of RETScreen to evaluate the economic benefit of the projects’ carbon emission reduction and conduct the cost-benefit analysis in the whole life cycle. The sensitivity analysis and Monte Carlo risk assessment are performed on the net present value (NPV) of the project. Through the algorithm analysis, the economic efficiency of gas powergeneration projects is significantly influenced by the natural gas price and on-grid price. Moreover, the impact of government policy on projects is also demonstrated and some feasible policy suggestions are proposed.