With China vigorously promoting the“Dual Carbon”targets of“striving to peak CO2 emission by 2030 and achieving carbon neutrality by 2060”

renewables such as wind power and solar power have been widely used

but at the same time it also leads to the continuous reduction of thermal power utilization hours represented by coal-fired power generation

and it is difficult to recover the cost in the electricity energy market. According to the current situation of power structure and market in Zhejiang Province

a direct capacity compensation mechanism is selected to help recovering coal-fired power’s costs

and a series of realistic compensation calculation process for Zhejiang Province is designed to calculate the effective capacity

various costs

market revenue and compensation price required for the unit.Combining the real unit data and future development forecast of Zhejiang Province

the direct capacity compensation price for 1 000 MW and 600 MW units in 2025 and 2030 with different coal prices and on-grid prices are calculated and their characteristics and differences are analyzed. The results provide reference for Zhejiang and other provinces who want to establish direct capacity compensation mechanism

so as to effectively protect the revenue of thermal power enterprises and improve grid security and flexibility.