Dr. Hao Chen recently had a paper published in the Energy Economics. The paper titled‘Evaluating the impacts of reforming and integrating China’s electricity sector’, was coauthored with Jian Cui and Feng Song from School of Applied Economics, Renmin University of China, Zhigao Jiang from Zhineng Consultant Company.

Abstract

Addressing the efficiency–equity–environment trade-off is an important part of implementing electricity sector  reform. To support China ’ s electricity market reform, this study conducts an  ex-ante analysis to quantify the  economic, distributional and environmental effects of marketization and integration. Three scenarios are  designed based on the current reform progress and possible reform directions, including a planning scenario, a  provincial market scenario and a regional market scenario. Using high-frequency data of electricity load, pro duction and trade from five southern Chinese provinces in 2018, we quantify the impacts on electricity gener ation mix, wholesale prices, carbon emissions and social welfare. The potential welfare improvement achieved from establishing provincial markets is 14.3 billion yuan, which could be further increased to 21.0 billion yuan  by integrating the provincial markets into a regional market. The regional average wholesale price could be  reduced by 23.5% 22.7% and (regional market) (provincial market), respectively. The carbon emissions could be  reduced by about 12.4 million tons (2.4%) in the provincial market scenario and 16.6 million tons (3.2%) in the regional market scenario. Moreover, individual provinces are affected heterogeneously from the marketization and integration, and the potential winners and losers have been identified from market reform. The regional market performs better than the provincial market in terms of overall efficiency gains and environmental outcomes but worse in addressing equity concerns.

Other information

Publication Date:2022

Journal:Energy Economics

Journal Issue: 108（2022）

DOI: https://doi.org/10.1016/j.eneco.2022.105912

Read the paper here.