Reforming the Operation Mechanism of Chinese Electricity System: Benefits, Challenges and Possible Solutions

Hao Chen, Chi Kong Chyong, Zhifu Mi and Yi-Ming Wei

The Energy Journal, 2020, vol. 41, issue 2, 219-246

Abstract: A new wave of electricity market reform was launched by the Chinese government in March 2015, and one of its major objectives was to optimize the power system operation by reforming the low-efficient equal share dispatch mechanism. To provide scientific decision-making support for the current reform, we establish a mixed-integer linear programming optimization model to simulate the post-reform results, and the reform benefits are subsequently estimated by comparing those results with the pre-reform results. Then, we develop a political economy framework to identify the challenges associated with implementation of economic dispatch. At last, we propose several regulatory and market measures to address these identified challenges.

Keywords: Power system operation; Economic dispatch; China; MILP; Optimization (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:41:y:2020:i:2:p:219-246

DOI: 10.5547/01956574.41.2.hche

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