Economic and Efficiency Analysis of China Electricity Market Reform Using Computable General Equilibrium Model

Yin, Jieting; Yan, Qingyou; Lei, Kaijie; Baležentis, Tomas; Štreimikienė, Dalia

doi:10.3390/su11020350

Cited by 13 publications

(7 citation statements)

References 28 publications

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“…As the "No. 9 Document" released in 2015 discusses, a new round of reform has taken place in China to improve marketization of the electricity market [34]. The document is a valuable reference, worthy of some deep analysis by developing countries.…”

Section: Current Status Of Marketization In China's Power Industrymentioning

confidence: 99%

Sustainable Development of Power Retailers and Industrial Parks in China’s Belt and Road Initiative

et al. 2019

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Energy infrastructure construction is a top priority and focus for the Belt and Road Initiative (BRI), and this drives dramatical demand for significant energy consumption growth and investment funds in BRI countries. In response, the concept of a regional power grid of an industrial park (RPGIP) has emerged as a new energy infrastructure, where the industrial power supply, load, and grid are integrated to form a balanced and independent regional power grid. Moreover, dramatically increased market competition on the retail side of the electricity market challenges developing countries striving to achieve sustainable development of power retailers. This paper proposes that power retailers transform into energy saving companies (ESCOs) to participate in the electricity management of an RPGIP. By using a financing scheme realized by asset securitization, power retailers can smoothly participate in the construction and operation of a power system of BRI that contributes to accelerating energy infrastructure construction, the electricity management of the RPGIP, and sustainable development of power retailers in BRI countries. Furthermore, this study provides a game analysis for achieving maximum benefits of power retailers and industrial consumers in the implementation of the financing scheme.

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Section: Current Status Of Marketization In China's Power Industrymentioning

confidence: 99%

Sustainable Development of Power Retailers and Industrial Parks in China’s Belt and Road Initiative

et al. 2019

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“…More details see http://www.gov.cn/zhengce/2019-08/14/content_ 5421133.htm. ticular aspects (Pollitt, 2020); for example, on electricity generation efficiency (e.g., Li et al, 2019), electricity production (e.g., Wang and Li, 2019), and economic efficiency of the electricity sector and electricity prices (e.g., Yin et al, 2019). These studies found that the new round of reform improved electricity generation efficiency, enhanced the productive efficiency of the electricity sector, reduced energy prices for households, and increased renewable energy generation.…”

Section: Introductionmentioning

confidence: 99%

In between the state and the market: An empirical assessment of the early achievements of China's 2015 electricity reform

2021

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This is the first study to investigate and quantify the extent to which the 2015 reform has already impacted the economic and technical performance as well as the security of supply of China's electricity sector. We use provincial data from 2003 to 2018 to estimate the impacts of the reform on on-grid prices, average retail electricity prices (including those for households) and supply reliability. We adopt fixed effect models together with other dynamic panel data models. We find that the 2015 reform has already had a negative impact on on-grid prices of electricity generated from thermal energy and on overall average retail prices, but the impacts on other prices are not statistically significant. Our results also suggest that the 2015 reform has had significantly negative impacts on technical efficiency, as measured by the coal burned per unit of thermal generation, but no impact on the line loss rate of electricity transmission. In addition, our empirical analysis suggests that the 2015 reform has reduced reliability and increased the instances of supply interruptions. These results are robust to different estimators and models. Finally, the effect of the reform is heterogeneous across regions. Our findings suggest that additional steps are needed to further improve the overall economic efficiency of the electricity sector in China, despite significant progress arising from the 2015 reform. The results may also provide useful lessons for other developing economies aiming to reform their power sectors and who are facing similar choices between the roles of the state and the market in ensuring efficient outcomes. JEL classification: L94; P21; P28.

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“…In China, government-controlled power generation companies own more than half of the total installed capacity; the investment and operation of grid companies are also totally dominated by the government [1][2][3]. Thus, electricity prices have long been fixed and strictly controlled [4].…”

Section: Introductionmentioning

confidence: 99%

Understanding the Economic Responses to China’s Electricity Price-Cutting Policy: Evidence from Zhejiang Province

Hu²,

Wang³

et al. 2022

Sustainability

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As a critical pattern to promote industrial growth and recover the economy, China has widely applied an electricity price-cutting policy, especially after the global spread of COVID-19. However, the current insufficient research indicates a noticeable knowledge gap around the actual outcome of this policy measure. This paper, therefore, aimed at filling this gap by focusing on the case of Zhejiang province. Recently, there have been three main kinds of price-cutting policies employed in Zhejiang, decreasing the general industrial electricity price, temporary electricity price-cutting, and targeted price reduction for large industries. Using a computable general equilibrium model that incorporates the Zhejiang electricity system’s operating characteristics, we simulated the economic impact of these electricity price adjustment policies. The results indicate that it was practical to promote the economy by reducing electricity prices, but the specific arrangements of policy have led to differences in economic stimulus consequences. This paper further obtained the multiplier effect in each industry. If electricity price adjustment policies were introduced only for industries with a higher comprehensive multiplier effect, the policy effectiveness would be further optimized.

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Economic and Efficiency Analysis of China Electricity Market Reform Using Computable General Equilibrium Model

Cited by 13 publications

References 28 publications

Sustainable Development of Power Retailers and Industrial Parks in China’s Belt and Road Initiative

Sustainable Development of Power Retailers and Industrial Parks in China’s Belt and Road Initiative

In between the state and the market: An empirical assessment of the early achievements of China's 2015 electricity reform

Understanding the Economic Responses to China’s Electricity Price-Cutting Policy: Evidence from Zhejiang Province

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