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Restructuring the Chinese Electricity Supply Sector – How industrial electricity prices are determined in a liberalized power market: lessons from Great Britain

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  • Michael G. Pollitt

    (Energy Policy Research Group University of Cambridge)

  • Lewis Dale

    (National Grid)

Abstract

In this paper, we begin by discussing the components of the price of industrial electricity in Great Britain, as an example of a fully reformed electricity market, where the market is roughly comparable in size to a reasonably large Chinese province. We go on to discuss the key actors in the liberalized electricity system in Great Britain, before unpacking each of the components of the price. We discuss the market determined elements first, then go on to introduce and discuss the regulated elements of the price before finishing with the central government determined price components. Our discussion covers the determination of the wholesale price, the retail margin, transmission charges, system balancing charges, distribution charges and environmental levies and taxes. In each of these cases we discuss the process by which they are determined (led by the market, the regulator, the central government or more than one) and the specific lessons for China. We conclude by emphasizing some of the high-level lessons on electricity price determination for China.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Michael G. Pollitt & Lewis Dale, 2018. "Restructuring the Chinese Electricity Supply Sector – How industrial electricity prices are determined in a liberalized power market: lessons from Great Britain," Working Papers EPRG 1839, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1839
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    References listed on IDEAS

    as
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    18. David M. Newbery, 2012. "Contracting for Wind Generation," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
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    Cited by:

    1. David Newbery, 2021. "Strengths and weaknesses of the British market model," Chapters, in: Jean-Michel Glachant & Paul L. Joskow & Michael G. Pollitt (ed.), Handbook on Electricity Markets, chapter 6, pages 156-181, Edward Elgar Publishing.
    2. Kęstutis Peleckis, 2022. "Application of the Multicriteria Method Seeking to Assess Concentration, and Its Effects on Competition in the Manufacturing Sector," Sustainability, MDPI, vol. 14(19), pages 1-30, September.
    3. Michael Pollitt, 2021. "Measuring the Impact of Electricity Market Reform in a Chinese Context," Working Papers EPRG2111, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.

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    More about this item

    Keywords

    Chinese power market reform; industrial electricity price; electricity liberalization;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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