An Empirical Study On The Effect Of Regulation On Electric Power Generation Industry In China

Electric power generation industry is an important and basic industry of a nation,public utility which is related to national welfare and people’s livelihood andundertakes important social responsibility. Electric power generation industry hasbeen developing rapidly since reform and opening in China. By the end of2010,national power generation capacity reached962.19million kilowatts which is16.8times in1978. Generating the calibration of the country reached4.228015trillion kwh,which is16.4times in1978. Electric power generation industry developed rapidly,which has relationship with regulatory reform in China. With the development of themeaning of natural monopoly, the electric power technology, changes in demand andthe power industry reform and China’s power system changing, power industryregulation model change from strict access regulation to deregulation, price regulationguidance from a planned economy to the present bidding, regulatory agencies from anumber of regulatory changes slowly for a regulation, laws and regulations regulatechanges more and more perfectly. As the source of the power industry, the quality ofpower industry management has a major impact on follow-up part of the electricityindustry. Therefore, the test of the effect of the current power generation industryregulatory reform has very important significance for the next step of the direction ofreform. In recent years, China has carried out most of the electricity industryregulation reform in the power generation industry. Therefore, it is pertinence andaccords with actual situation to study the effect of power industry regulatory reformfrom the point of power generation industry which is a main reason of choosingChinese power generation industry.The paper is divided into seven parts.The first part reviews status of regulatory effect at home and abroad and thenelaborated the relevant theory of regulatory effect evaluation, and briefly reviewed.The second part empirical analyzes electric power generation industry developmenthistory, current situation and regulatory environment in China. The third part analyzeselectric power generation industry status, the motivation of regulatory system reform,regulatory system and regulatory institution. The fourthly part combines with China’s power industry, build the evaluation criteria and indicators of the effect of regulationand empirical analysis of time series methods the effect of the regulation of the powergeneration industry at the industry level based on theory of theory of regulation andthe effect of regulation evaluation. The fifthly part uses panel data and stochasticfrontier analysis methods to measure regulatory effect from the two aspects of interestrate and efficiency of power generation companies. The sixthly part measures marketstructure from the perspective of market concentration power industry to examinewhether the regulatory reform to break the monopoly and promote competition. Theseventhly part obtains the current power industry regulatory reform effectconclusions.which determines the initial regulatory reform effect conclusions byobserving the power generation industry status development variable, combined withthe industry level, corporate level and competitive level of quantitative analysisconclusions, comprehensive comparative analysis of these results,In summary, we draw three conclusions, which also constitute the contributionsof this paper.We found that power electric power generation industry generating capacity,installed capacity increased rapidly over the past decade, the basic realization of thesupply and demand balance in China. China’s power structure is still dominated bythermal power, accounting for about80%. Coal consumption is declining. Electricityprices showed a rising trend. The motivation of regulatory system reform of theelectric power generation industry is mainly the change of the meaning of naturalmonopolies, advances in power technology, the increase in electricity demand, raisefunds for construction, the elimination of monopoly and introducing competitionmechanism and other factors. Regulatory system introduces power industry regulatoryagencies, power companies, power companies, power companies, regulatory systemand characteristics. It is found that Regulatory agencies of China’s power industry arein the functions of the transfer phase. Regulatory institution mainly includes entryregulation institution, the price regulation institution, laws and regulations, regulatoryinstitution, environmental regulation institution. The regulatory institution has thefollowing characteristics: Entry regulation is de-regulation in the form and morestringent actually. Price regulation is nominal fair, reasonable and actual unfair, inefficient strict. Investment regulation is strict. Regulatory authority is moredecentralized. Regulatory is economic regulation-based and ignores the socialregulation.Secondly, the evaluation index system of effect regulatory of power generationindustry is more comprehensive, which does not only include traditional volume,price, profit, efficiency, four economic regulation indicators, but environmentalregulatory indicators. It is more comprehensive, more scientific and reasonable. Theefficiency measure is no longer the traditional static or simple Douglas productionfunction method, but by now the more advanced data envelopment analysis andstochastic frontier analysis. The results indicate that: the regulation effect of powergeneration industry in generating capacity and efficiency is good, but the effect is notobvious in prices, profits and the environment at the industry level, while theregulation reform of separation of genetation and transmission is positive impact onprofits and negative impact on of efficiency of power generation industry of listedcompanies at the enterprise level.Thirdly, this article measures market centralization ratio of the power generationindustry since1949, and judges market structure of power generation industry onvarious stages, which provides a reference for observing breaking the effect of themonopoly of power generation and promoting competition. The results showed that:the competitive effect of regulatory reform of the electric power generation industry isgood in China. The national power generation market has gradually transformed froma monopolistic market structure into the oligopolistic market structure. Regionalpower generation market was already competitive market structure, but the marketconcentration shows a rising trend in China.Regulatory effect study is the research of government regulation policy toachieve the regulatory objectives, its purpose is to evaluate the effect of existingregulatory policy and preparing for the implementation of regulatory policy.Regulatory effect study policy evaluation after policy implemented, which helps thegovernment’s future design, implement and improve policies. This paper makes use ofeconometrics, operations research, statistics quantitative methods to estimates theeffect of regulation and observes the regulatory effect from multiple levels and multiple stages.The result will be more scientific and reasonable. The research ofregulatory effects of power generation industry in this paper can provide an importantanalytical tool for analyzing effect of regulatory policy of power generation industry,some empirical basis for the comprehensive assessment of electric power generationindustry regulatory effects and a reference and a new concept, new methods for othernatural monopoly industry regulatory effectiveness analysis to improve regulatoryefficiency and the quality of government regulation in China.