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Reforming the Operation Mechanism of Chinese Electricity System: Benefits, Challenges and Possible Solutions

Author

Listed:
  • Hao Chen
  • Chi Kong Chyong
  • Zhifu Mi
  • Yi-Ming Wei

Abstract

A new wave of electricity market reform was launched by the Chinese government in March 2015, and one of its major objectives was to optimize the power system operation by reforming the low-efficient equal share dispatch mechanism. To provide scientific decision-making support for the current reform, we establish a mixed-integer linear programming optimization model to simulate the post-reform results, and the reform benefits are subsequently estimated by comparing those results with the pre-reform results. Then, we develop a political economy framework to identify the challenges associated with implementation of economic dispatch. At last, we propose several regulatory and market measures to address these identified challenges.

Suggested Citation

  • Hao Chen & Chi Kong Chyong & Zhifu Mi & Yi-Ming Wei, 2020. "Reforming the Operation Mechanism of Chinese Electricity System: Benefits, Challenges and Possible Solutions," The Energy Journal, , vol. 41(2), pages 219-246, March.
    • Handle: RePEc:sae:enejou:v:41:y:2020:i:2:p:219-246
    DOI: 10.5547/01956574.41.2.hche
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    References listed on IDEAS

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