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Vertical relationships in China’s electricity industry: The quest for competition?

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  • Zhang, Vanessa Yanhua
  • Chen, Yongjun

Abstract

In this paper we revisit the debate on the role of vertical integration in the energy sectors: whether vertical integration between coal and electricity sectors is a path to create a competitive electricity market in China. We discuss coal-power conflict and potential anti-competitive concerns related to vertical integration, such as raise rival’s cost and collusion, and suggest that regulators and policy makers should pay more attention to the behavior of integrated companies. In particular, they should balance the tradeoff of vertical integration between coal and electricity companies and ensure that efficiency gains should offset anti-competitive effects.

Suggested Citation

  • Zhang, Vanessa Yanhua & Chen, Yongjun, 2011. "Vertical relationships in China’s electricity industry: The quest for competition?," Utilities Policy, Elsevier, vol. 19(3), pages 142-151.
    • Handle: RePEc:eee:juipol:v:19:y:2011:i:3:p:142-151
    DOI: 10.1016/j.jup.2011.01.001
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    References listed on IDEAS

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    1. Xu, Shaofeng & Chen, Wenying, 2006. "The reform of electricity power sector in the PR of China," Energy Policy, Elsevier, vol. 34(16), pages 2455-2465, November.
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    6. Chen, Yongmin, 2001. "On Vertical Mergers and Their Competitive Effects," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 667-685, Winter.
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    8. Kerkvliet, Joe, 1991. "Efficiency and Vertical Integration: The Case of Mine-Mouth Electric Generating Plants," Journal of Industrial Economics, Wiley Blackwell, vol. 39(5), pages 467-482, September.
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    Cited by:

    1. 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.
    2. Wang, Jiexin & Wang, Song, 2023. "The effect of electricity market reform on energy efficiency in China," Energy Policy, Elsevier, vol. 181(C).
    3. Cheng, Y.S. & Wong, W.K. & Woo, C.K., 2013. "How much have electricity shortages hampered China's GDP growth?," Energy Policy, Elsevier, vol. 55(C), pages 369-373.
    4. Cui, Herui & Wei, Pengbang, 2017. "Analysis of thermal coal pricing and the coal price distortion in China from the perspective of market forces," Energy Policy, Elsevier, vol. 106(C), pages 148-154.
    5. Li, Hong-Zhou & Tian, Xian-Liang & Zou, Tao, 2015. "Impact analysis of coal-electricity pricing linkage scheme in China based on stochastic frontier cost function," Applied Energy, Elsevier, vol. 151(C), pages 296-305.
    6. Sumei Chen & Lingyun He, 2013. "Deregulation or Governmental Intervention? A Counterfactual Perspective on China's Electricity Market Reform," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(4), pages 101-120, July.

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