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Coordination Mechanism Analysis of Grid Planning, Investment, and Tariff in the Context of Power Market Reform

In: Proceedings of the 2024 6th International Conference on Economic Management and Model Engineering (ICEMME 2024)

Author

Listed:
  • Guoquan Wang

    (State Grid Chongqing Electric Power Company Economic and Technological Research Institute)

  • Anli Sun

    (State Grid Chongqing Electric Power Company Economic and Technological Research Institute)

  • Dan Zhang

    (State Grid Chongqing Electric Power Company Economic and Technological Research Institute)

  • Songsong Liu

    (State Grid Chongqing Electric Power Company Economic and Technological Research Institute)

Abstract

Since 2015, China has established a unique transmission and distribution tariff (TDT) regulatory system centered on “permitted costs + reasonable returns.” The TDTs, which were originally applied only to some market-oriented industrial and commercial users, have transitioned to being implemented by all industrial and commercial users. Against this backdrop, the business model of grid enterprises is rapidly shifting from earning purchase-sale spreads to collecting TDTs. Rationalizing the interaction mechanisms among grid planning, investment, tariffs, and the market has become crucial for promoting effective investments, stabilizing revenues, and ensuring sustainable development. In the face of unprecedented challenges and opportunities encountered in the planning, investment, and operation of power grids, multiple studies have delved into the optimized decision-making pathways for power grid planning and investment, analyzing the interconnected mechanisms between power grid investment, planning, and electricity prices. The importance of post-evaluation mechanisms for power grid investment projects has been emphasized, highlighting the positive achievements of power grid companies in promoting the application of clean energy. Some studies have provided effective tools for navigating market dynamics and uncertainties by constructing revenue forecasting models for power grid enterprises. Simultaneously, from a regulatory perspective, there are warnings that while pursuing economic benefits, it is imperative to strengthen the oversight of power grid investments to ensure the effectiveness and safety of investment activities.

Suggested Citation

  • Guoquan Wang & Anli Sun & Dan Zhang & Songsong Liu, 2025. "Coordination Mechanism Analysis of Grid Planning, Investment, and Tariff in the Context of Power Market Reform," Advances in Economics, Business and Management Research, in: Lina Zhong & Tang Yao & Chee Yoong Liew & Hongbo Li (ed.), Proceedings of the 2024 6th International Conference on Economic Management and Model Engineering (ICEMME 2024), pages 297-312, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-690-1_29
    DOI: 10.2991/978-94-6463-690-1_29
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