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Potential Gains From Reforming Price Caps in China’s Power Sector

Author

Listed:
  • Bertrand Rioux
  • Philipp Galkin
  • Axel Pierru
  • Frederic Murphy

    (King Abdullah Petroleum Studies and Research Center)

Abstract

When energy sectors transition from government-controlled to market-driven systems, the legacy regulatory instruments can create unintended market distortions and lead to higher costs. In China, the most notable regulatory throwback is ceilings on electricity prices that generators can charge utilities, which are specified by plant type and region. We built a mixed complementarity model calibrated to 2012 data to examine the impact of these price caps on the electricity and coal sectors.

Suggested Citation

  • Bertrand Rioux & Philipp Galkin & Axel Pierru & Frederic Murphy, 2016. "Potential Gains From Reforming Price Caps in China’s Power Sector," Discussion Papers ks-1652-dp047, King Abdullah Petroleum Studies and Research Center.
    • Handle: RePEc:prc:dpaper:ks-1652-dp047
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