What effect has the 2015 power market reform had on power prices in China? Evidence from Guangdong and Zhejiang

Bai-Chen Xie, Jun Xu and Michael Pollitt

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This paper presents an analysis of the impact of the recent power market reform process in China – following the No.9 Document of March 2015 – on the industrial price of electricity. We do this by picking a typical power price for a medium sized industrial customer in two of China’s leading reform provinces: Guangdong and Zhejiang. We find that power market reform, which is characterised by the introduction of wholesale electricity markets, has substantially reduced prices. Our detailed analysis shows that these price falls have come from a number of different sources: falls in the prices paid to generators, reductions in grid charges and falls in government taxes and additional charges. We show that the regulated price falls by 26.4% in Guangdong and by 26.9% in Zhejiang. The market price falls even further by 27.7% in Guangdong and 30.4% in Zhejiang. We conclude that while the impact of the power markets is significant, the associated changes to network charges and other government determined components of the price are more significant.

Keywords: Chinese power market reform; electricity prices; No.9 Document (search for similar items in EconPapers)
JEL-codes: L94 (search for similar items in EconPapers)
Date: 2020-05-21
New Economics Papers: this item is included in nep-cna, nep-com, nep-ene and nep-tra
Note: mgp20
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2043

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