Research On The Incentive Regulation Theory Of Power Industry Based On Sustainable Development

Since the early1980's, many countries have implemented electricity sector reforms in order to improve resource allocation and production efficiency. Many of these reforms have unbundled generation, transmission, distribution, and retail activities of the sector and introduced competition in generation and retail. Recent years, China carried on the electric power market reform, which separated the generation sector and power grid sector, carried out the generation bidding, constructed regional markets. Market-oriented reforms improve efficiency, at the same time, many new issues that need further research, such as trade-off between economical and environmental benefit. A scientific and efficient regulation mechanism of power industry need to be established to encourage investment and reduce cost in the background of sustainable development.Based on a comprehensive review of the research in domestic and foreign, a power industry regulation theory with sustainable development and incentive concept is put forward. Generation regulation mode considering environmental regulation is proposed. Transmission incentive rregulation mode considering optimal capacity is proposed. Distribution yardstick competition regulation mode considering reliability is proposed. This study has some reference on the initial formation of the future blueprint for the construction of China's electricity market, acceleration of China's electric electrisity market reform, the establishing of fair and efficient transmission and distribution regulation mechanism.Firstly, the concept of power industry sustainable development is stated which means that to match environment with economic and social benefit, in detail, the development of power industry hamonizes environment and protect grid invetors'benefit and power distribution reliability. The priciple and method of establishing this incentive regulation system is also analyzed.Secondly, generation regulation considering enviromental regulation is proposed. The sustainable development require regulator to consider the effect of power generation on enviroment to induce the economic and environment coordinated growth. Then the generation regulation considering enviromental regulation is proposed and the cooperative regulation regim of enviroment and economic regulation gaining more social welfare is demonstrated. The effects of emission charging system and permit system on dominate generator's strategy behavior and social welfare in perfet and imperfect market in compared. The validity of this regulation mode is proved.Thirdly, transmission incentive regulation mode considering optimal capacity is proposed, computing the optimal capacity based on nodal pricing. The improved pricing cap and Vogelsang-Finsinger (V-F) is proposed, computing the optimal capacity ensuring the social welfarea. The incremental surplus subsidy scheme is propose, which can protect transmission company to achieve optimal capacity investment without budget constraint.Fourthly, distribution yardstick regulation mode considering reliability is proposed. Including consumers'preference, technology standard and information asymmetry, the distribution yardstick regulation mode considering reliability is established. By solving the optimal capacity in maximizing social welfare, consumers'surplus and the profit of distribution company, the condition in which distribution company would accept the contract is obtained.