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Sustainability 2019, 11(2), 350; https://doi.org/10.3390/su11020350

Economic and Efficiency Analysis of China Electricity Market Reform Using Computable General Equilibrium Model

1
School of Information, Beijing Wuzi University, Beijing 101149, China
2
School of Economic and Management, North China Electric Power University, Beijing 102206, China
3
DongGuan Power Supply Bureau, GuangDong Power Grid Corp., DongGuan 523008, China
4
Lithuanian Institute of Agrarian Economics, Vilnius 01113, Lithuania
*
Authors to whom correspondence should be addressed.
Received: 4 December 2018 / Revised: 27 December 2018 / Accepted: 3 January 2019 / Published: 11 January 2019
(This article belongs to the Special Issue Sustainable Energy Economics and Policy)
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Abstract

China’s electricity industry has been undergoing a process of regulatory reform. This study aims to analyse the impact of liberalization on the electricity market assuming different degrees of scope of the reforms by applying a computable general equilibrium (CGE) model. In this paper, we consider the three sub-sectors of the electricity industry, namely generation, transmission and distribution. We assume that the reform will phase out the entry barriers on the generation side and allow for competition on the distribution side, while keeping the transmission side under regulation. The results showed that the reform could enhance efficiency in the electricity sector and reduce energy prices for households. Introduction of a complete competition model would decrease welfare by 5.394 billion yuan, if contrasted to a limited competition model. The composite energy price would decline under both scenarios, whereas the quantity of energy consumed by the households would go up. This research, thus, contributes to literature on the economic effects of China’s electric power market reform, and can be used as a case study to support policy decisions for the decision-makers. View Full-Text
Keywords: electricity market reform; computable general equilibrium (CGE) model; liberalisation; regulation; China electricity market reform; computable general equilibrium (CGE) model; liberalisation; regulation; China
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Yin, J.; Yan, Q.; Lei, K.; Baležentis, T.; Streimikiene, D. Economic and Efficiency Analysis of China Electricity Market Reform Using Computable General Equilibrium Model. Sustainability 2019, 11, 350.

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