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China's electricity market restructuring and technology mandates: Plant-level evidence for changing operational efficiency

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  • Ma, Chunbo
  • Zhao, Xiaoli

Abstract

China's electricity sector has experienced substantial efficiency improvement during the last one and a half decades. The recent literature has mostly attributed the efficiency improvement to the 2002 unbundling reform with little attention paid to the large scale retrofitting process introduced by technology mandates. Using a unique panel dataset for hundreds of power plants from 1997 to 2010, we are able to examine the contributions from technology mandates and market restructuring. We confirm the significant contributions from the unbundling reform but more importantly, technology mandates have contributed at least half of the observed efficiency improvement during this period. The results have significant implications for efficiency and demand forecast in the future.

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  • Ma, Chunbo & Zhao, Xiaoli, 2015. "China's electricity market restructuring and technology mandates: Plant-level evidence for changing operational efficiency," Energy Economics, Elsevier, vol. 47(C), pages 227-237.
    • Handle: RePEc:eee:eneeco:v:47:y:2015:i:c:p:227-237
    DOI: 10.1016/j.eneco.2014.11.012
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    Cited by:

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    2. Zeng, Ming & Yang, Yongqi & Wang, Lihua & Sun, Jinghui, 2016. "The power industry reform in China 2015: Policies, evaluations and solutions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 94-110.
    3. Ke Wang & Jieming Zhang & Yi-Ming Wei, 2017. "Operational and environmental performance in China¡¯s thermal power industry: Taking an effectiveness measure as complement to an efficiency measure," CEEP-BIT Working Papers 100, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    4. Wang, Chunhua & Cao, Xiaoyong & Mao, Jie & Qin, Ping, 2019. "The changes in coal intensity of electricity generation in Chinese coal-fired power plants," Energy Economics, Elsevier, vol. 80(C), pages 491-501.
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    6. Chen, Hao & Cui, Jian & Song, Feng & Jiang, Zhigao, 2022. "Evaluating the impacts of reforming and integrating China's electricity sector," Energy Economics, Elsevier, vol. 108(C).
    7. Sun, Kege & Wu, Libo, 2020. "Efficiency distortion of the power generation sector under the dual regulation of price and quantity in China," Energy Economics, Elsevier, vol. 86(C).
    8. Zhang, Ning & Jiang, Xue-Feng, 2019. "The effect of environmental policy on Chinese firm's green productivity and shadow price: A metafrontier input distance function approach," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 129-136.
    9. Flavio Menezes & Xuemei Zhang, 2016. "Regulatory Incentives for a Low-Carbon Electricity Sector in China," Discussion Papers Series 562, School of Economics, University of Queensland, Australia.
    10. Ke Wang & Zhifu Mi & Yi‐Ming Wei, 2019. "Will Pollution Taxes Improve Joint Ecological and Economic Efficiency of Thermal Power Industry in China?: A DEA‐Based Materials Balance Approach," Journal of Industrial Ecology, Yale University, vol. 23(2), pages 389-401, April.
    11. Huiru Zhao & Yuwei Wang & Sen Guo & Mingrui Zhao & Chao Zhang, 2016. "Application of a Gradient Descent Continuous Actor-Critic Algorithm for Double-Side Day-Ahead Electricity Market Modeling," Energies, MDPI, vol. 9(9), pages 1-20, September.
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    13. Wang, H. & Ang, B.W. & Wang, Q.W. & Zhou, P., 2017. "Measuring energy performance with sectoral heterogeneity: A non-parametric frontier approach," Energy Economics, Elsevier, vol. 62(C), pages 70-78.
    14. Wu, Xiuqin & Zhao, Jinsong & Zhang, Dayong & Lee, Wen-Chieh & Yu, Chin-Hsien, 2022. "Resource misallocation and the development of hydropower industry," Applied Energy, Elsevier, vol. 306(PA).
    15. She, Zhen-Yu & Meng, Gang & Xie, Bai-Chen & O'Neill, Eoghan, 2020. "The effectiveness of the unbundling reform in China’s power system from a dynamic efficiency perspective," Applied Energy, Elsevier, vol. 264(C).
    16. Li, Gao & Ruonan, Li & Yingdan, Mei & Xiaoli, Zhao, 2022. "Improve technical efficiency of China's coal-fired power enterprises: Taking a coal-fired-withdrawl context," Energy, Elsevier, vol. 252(C).
    17. Eisenberg, Tom, 2024. "Missing data and the effects of market deregulation: Evidence from Chinese coal power," International Journal of Industrial Organization, Elsevier, vol. 93(C).
    18. Cao, Jing & Ho, Mun S. & Ma, Rong & Zhang, Yu, 2024. "Transition from plan to market: Imperfect regulations in the electricity sector of China," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 509-533.
    19. Liu, HuiHui & Zhang, ZhongXiang & Chen, Zhan-Ming & Dou, DeSheng, 2019. "The impact of China's electricity price deregulation on coal and power industries: Two-stage game modeling," Energy Policy, Elsevier, vol. 134(C).
    20. Zhao, Xiaoli & Cai, Qiong & Li, Shujie & Ma, Chunbo, 2018. "Public preferences for biomass electricity in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 95(C), pages 242-253.
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    More about this item

    Keywords

    Efficiency; Deregulation; Electricity; China; Technology mandate;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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