To what extent will China's ongoing electricity market reforms assist the integration of renewable energy?

Zhang, Sufang; Andrews‐Speed, Philip; Li, Sitao

doi:10.1016/j.enpol.2017.12.002

Cited by 127 publications

(46 citation statements)

References 6 publications

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“…-all presuppose that central government takes decisive actions in delineating the structure of its electricity market, or is setting up a system for an functional and transparent 'unbundled' electricity provision mechanism. Given the intrinsic political problems, these reform steps are not feasible given the demise of an independent central regulator (Zhang, Andrews-Speed, and Li, 2018). As an illustrative example, Davidson (2018, p.300) notes that the most successful example of cross-jurisdiction exchange has been long-term auctions in parts of North Grid -Beijing, Tianjin, and Northern Hebeiwhich involve government interests closely tied with Beijing, "indicating the likelihood that a strong central government role was necessary to make this regional market happen.…”

Section: Resolving the Curtailment Of Renewable Energy Inputsmentioning

confidence: 99%

Transforming China's electricity sector: Politics of institutional change and regulation

Lin

Purra

2019

Energy Policy

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The political failure of China's first independent regulator in a strategic industry -the State Electricity Regulatory Commission (SERC), 2002-2013 -provides a natural experiment to uncover fundamental challenges to a gradualist approach to electricity market formation. Taking a political institutional approach, we show that while it was largely predictable that the breakup of the monopolistic power industry in 2002 created bureaucratic and corporate interests that would undercut the institutional role of SERC, subsequent difficulties in reforming electricity pricing, dispatch system, and integrating renewable energy sources strongly suggests that a central regulatory body would be necessary to lead a decisive transition to a market-based electricity market. AbstractThe political failure of China's first independent regulator in a strategic industry -the State Electricity Regulatory Commission (SERC), 2002-2013 -provides a natural experiment to uncover fundamental challenges to a gradualist approach to electricity market formation. Taking a political institutional approach, we show that while it was largely predictable that the breakup of the monopolistic power industry in 2002 created bureaucratic and corporate interests that would undercut the institutional role of SERC, subsequent difficulties in reforming electricity pricing, dispatch system, and integrating renewable energy sources strongly suggests that a central regulatory body would be necessary to lead a decisive transition to a market-based electricity market.

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Section: Resolving the Curtailment Of Renewable Energy Inputsmentioning

confidence: 99%

Transforming China's electricity sector: Politics of institutional change and regulation

Lin

Purra

2019

Energy Policy

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“…On the other hand, the large-scale development of renewable energy may damage the status of coal-fired power units in the competitive electricity market in the future. As the spot price of electricity market is determined by the marginal cost, renewable generation units such as wind turbines and solar photovoltaics will have a dominant position in electricity market bidding due to their zero marginal cost [29,30]. The second aims at the implementation of a national carbon market, which represents a breakthrough for the electricity sector.…”

Section: Structure and Assumptionsmentioning

confidence: 99%

Scenario Analysis in the Electric Power Industry under the Implementation of the Electricity Market Reform and a Carbon Policy in China

Wang

2019

Energies

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In China, electricity market reform was first implemented in 2015. At the same time, the national carbon market was built, along with the electricity industry, which was considered a breakthrough. Some key considerations for the future development of China's electricity system include the implementation of demand-side measures in order to adjust the peak-to-valley difference and the economic dispatch of increasing intermittent renewable energy and traditional energy in the process of power marketization with the implementation of a carbon policy. This paper examines the impact of policies on electricity generation by modelling the evolution process of power marketization and the economic dispatch of generation technologies over a sixteen-year period beginning in 2020. We model four potential influencing factors of government policy: (1) the demand response mode;(2) power marketization process; (3) capacity adjustment of thermal power units; and (4) carbon taxes, which vary in terms of their timing and amount. This model assesses the impact of these influencing factors on the competition between electricity generators using a range of output variables, including generation portfolios, electricity prices, capacity factors, CO 2 emissions, etc. The results show that the new round of electricity market reforms has had a positive impact on renewable energy generation. The influence of carbon policy is evident in the promotion, transformation and elimination of thermal units, and an indirect increase in renewable energy generation.Energies 2019, 12, 2152 4 of 26 is considered, and (4) the power sector pays the carbon cost of thermal power units under the implementation of the carbon market.An illustrative model structure of power generation economic analysis is presented in Figure 1, including the data input, model design scenarios, objective functions and model output. The data input requires data on the detailed composition of the power sector at the beginning of the planning horizon, predicted power demand, future installed capacity development plan, CO 2 prices, as well as the technological and fuel parameters, considered over the planning horizon. The modus of China's future electricity generation is divided into two parts, under electricity marketization, in this model: the first part is the "equal shares" dispatch generation for the planned electricity sector, whereby all types of power generation technologies comply with the "equal shares" electricity generation rules; the second part entails the "economic optimization" dispatch generation for the electricity market sector, which is under an economic optimization algorithm that selects the lowest-cost option for electricity generation. The output of the model can provide detailed information about the pathway of China's power sector under different policy scenarios over the planning horizon, including the power generation profiles, capacity factors of various power generation technologies, market price on an hourly basis, costs and revenues of various generatio...

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“…Meng (2016) claimed that reform caused a downshift to the "natural" generation efficiency curve of the thermal power industry [19]. Zhu and Yan et al (2017) [21] and [22] analyzed the impacts of renewable electricity promotion. They found that market reform not only promoted the penetration but also increased the utilization ratio of renewables significantly.…”

Section: Literature Reviewmentioning

confidence: 99%

Interaction between Industrial Policy and Stock Price Volatility: Evidence from China’s Power Market Reform

et al. 2018

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This paper examines how China's power market reform influences the stock price volatility of listed power companies. We use the Iterative Cumulative Sums of Squares (ICSS) algorithm to identify structural breakpoints in stock prices, then analyze the characteristics of stock price volatility based on the GARCH model and report the impact of power regulation on stock price fluctuations based on the Autoregressive Distributed Lag (ARDL) model. Using data on power stock price index followed by industrial policy issued between 2006 and 2012, we find that: (1) three structural breaks in China's power stock price volatility were related to the promulgation of power market reform policies; (2) industrial policies promote the reduction of power stock price fluctuations and its impact on power stock price volatility is consistent in the long run; and (3) the recent policies related to renewable energy do not have a very significant impact on the power stock market.

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To what extent will China's ongoing electricity market reforms assist the integration of renewable energy?

Cited by 127 publications

References 6 publications

Transforming China's electricity sector: Politics of institutional change and regulation

Transforming China's electricity sector: Politics of institutional change and regulation

Scenario Analysis in the Electric Power Industry under the Implementation of the Electricity Market Reform and a Carbon Policy in China

Interaction between Industrial Policy and Stock Price Volatility: Evidence from China’s Power Market Reform

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