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Deregulation of power generation planning and elimination of coal power subsidy in China

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  • Yuan, Jiahai
  • Guo, Xiaoxuan
  • Zhang, Weirong
  • Chen, Sisi
  • Ai, Yu
  • Zhao, Changhong

Abstract

In this research, we define three kinds of subsidy to coal power under the existing institutional structure in China. They are an environmental subsidy, a squeezing-out renewable subsidy, and a price-protection subsidy. Based on a practical account framework, solid dataset, and reasonable assumptions, we estimate a total subsidy of 263.7 billion Chinese Yuan in 2016. We also provide a reference estimate on environmental subsidy by using the Externality Cost approach. Though these subsidies will be removed by 2020, with the deregulation of the power sector, such a shift will trigger stranded asset risks. We conclude with policy implications for the deregulation of power generation planning and market reform to Chinese policymakers.

Suggested Citation

  • Yuan, Jiahai & Guo, Xiaoxuan & Zhang, Weirong & Chen, Sisi & Ai, Yu & Zhao, Changhong, 2019. "Deregulation of power generation planning and elimination of coal power subsidy in China," Utilities Policy, Elsevier, vol. 57(C), pages 1-15.
    • Handle: RePEc:eee:juipol:v:57:y:2019:i:c:p:1-15
    DOI: 10.1016/j.jup.2019.01.007
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    Cited by:

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    3. Xiaonan Wang & Licheng Wang & Jianping Chen & Shouting Zhang & Paolo Tarolli, 2020. "Assessment of the External Costs of Life Cycle of Coal: The Case Study of Southwestern China," Energies, MDPI, vol. 13(15), pages 1-26, August.
    4. Li, Yuan & Zhou, You & Yi, Bo-Wen & Wang, Ya, 2021. "Impacts of the coal resource tax on the electric power industry in China: A multi-regional comprehensive analysis," Resources Policy, Elsevier, vol. 70(C).
    5. Yang, Zhiqing & Liang, Jing, 2023. "The environmental and economic impacts of phasing out cross-subsidy in electricity prices: Evidence from China," Energy, Elsevier, vol. 284(C).
    6. Haonan Zhang & Xingping Zhang & Jiahai Yuan, 2020. "Coal power in China: A multi‐level perspective review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 9(6), November.
    7. Wang, Yadong & Mao, Jinqi & Chen, Fan & Wang, Delu, 2022. "Uncovering the dynamics and uncertainties of substituting coal power with renewable energy resources," Renewable Energy, Elsevier, vol. 193(C), pages 669-686.
    8. Wang, Peng & Yang, Muyi & Mamaril, Kristy & Shi, Xunpeng & Cheng, Beibei & Zhao, Daiqing, 2021. "Explaining the slow progress of coal phase-out: The case of Guangdong-Hong Kong-Macao Greater Bay Region," Energy Policy, Elsevier, vol. 155(C).

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