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Deregulation, vertical unbundling and the performance of China's large coal-fired power plants

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  • Zhao, Xiaoli
  • Ma, Chunbo

Abstract

In 2003, China's integrated electricity utility – the State Power Corporation (SPC) – was unbundled and dismantled into five generation groups and two grid companies in an effort to increase competition and improve efficiency. In this paper, we study the impact of this deregulation reform on the operational efficiency for a balanced panel of 34 large power plants for the period 1997–2010. We find that on average these power plants have converged to the technological frontier over the sample period. Controlling for substantial heterogeneity in the technical profile, we also find that the unbundling reform has boosted productivity of China's large thermal power plants; however, the presumably differential impacts of the reform on the previously SPC-managed power plants and the independent power producers in our sample are insignificant.

Suggested Citation

  • Zhao, Xiaoli & Ma, Chunbo, 2013. "Deregulation, vertical unbundling and the performance of China's large coal-fired power plants," Energy Economics, Elsevier, vol. 40(C), pages 474-483.
    • Handle: RePEc:eee:eneeco:v:40:y:2013:i:c:p:474-483
    DOI: 10.1016/j.eneco.2013.08.003
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    More about this item

    Keywords

    Efficiency; Deregulation; China; Electricity reform;
    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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