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Potential Gains From Reforming Price Caps in China’s Power Sector

Bertrand Rioux, Philipp Galkin, Axel Pierru () and Frederic Murphy
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Frederic Murphy: King Abdullah Petroleum Studies and Research Center

Discussion Papers from King Abdullah Petroleum Studies and Research Center

Abstract: When energy sectors transition from government-controlled to market-driven systems, the legacy regulatory instruments can create unintended market distortions and lead to higher costs. In China, the most notable regulatory throwback is ceilings on electricity prices that generators can charge utilities, which are specified by plant type and region. We built a mixed complementarity model calibrated to 2012 data to examine the impact of these price caps on the electricity and coal sectors.

Keywords: Coal; Economic Modeling; Energy Sector; Feed in Tariffs; Fuel Mix; Fuel Price; Mixed Complimentarity Problem (MCP) Model; Power Generation; Price Caps; Price Deregulation; Subsidies (search for similar items in EconPapers)
Pages: 34
Date: 2016-09-29
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