Analysis and Measure of Power Grid’s Market Power in China
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| Title | Analysis and Measure of Power Grid’s Market Power in China
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| Author | Yu Liangchun and Fu Qiang |
| Organization | School of Economics, Shandong University |
| Email | lcyu@sdu.edu.cn |
| Key Words | Electricity Industry; Economic Growth; Regulation Failure; Market Power |
| Abstract | A regulation model is established to analyze growth and dilemma during the reformation of China’s electricity industry. The formation mechanism, influence factors and measure of power grid market power in China is discussed in detail. We find that the regulator lower the price and profit of power grid enterprise to develop economy. However, imperfect supervision leads to “win-win exchange” regulation failure and cross- subsidy from small customers to large departments. It is also found that regional disparity, repeated games, and industrial structure will aggravate regulation failure. Whether “structure separation” lowers market power depends on the net price. Next, we raise the methods on how to measure market power, and design a new way to reform electricity industry. |
| Serial Number | WP167 |
| Time | 2012-02-14 |
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